Assume the Marginal Propensity to Consume (MPC) Is 0

question 8

Multiple Choice

Assume the marginal propensity to consume (MPC) is 0.8 and there is a $200 billion increase in government purchases in an economy, other things constant. In the first round of induced additional consumption, consumption expenditures will increase by:

• A)$80 billion.
• B)$160 billion.
• C)$200 billion.
• D)$800 billion.
• E)$280 billion

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Definitions:

Self-absorption

Excessive preoccupation with oneself and one's own feelings or affairs.

Drinking Prevention

Efforts and strategies to reduce or prevent the consumption of alcohol, especially underaged drinking or drinking to excess.

Stress Management

Techniques and strategies used to handle stress effectively, promoting mental and physical well-being.

Self-esteem

A person's overall subjective sense of personal worth or value.