Among the Following Marginal Propensity to Consume (MPC) Values, Which

question 38

Multiple Choice

Among the following marginal propensity to consume (MPC) values, which one would have the highest multiplier effect?

• A)1/3
• B)2/3
• C)3/4
• D)2/5
• E)1/5​

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Definitions:

Treasury Bond

A long-term, interest-bearing security issued by the U.S. government, considered one of the safest investments due to government backing.

Par Value

The face value of a bond or stock as stated by the issuing company, which does not necessarily match its market value.

Newspaper Quote

Financial information, including stock prices, dividend data, and market analysis, traditionally published in newspapers.

AAA Corporate Bonds

High-grade bonds issued by corporations with the highest rating of creditworthiness, indicating very low risk of default.