Suppose the Marginal Propensity to Consume Is 0

question 283

Multiple Choice

Suppose the marginal propensity to consume is 0.8 and the government cuts taxes by $40 billion. Real GDP will _____ by _____.

• A)increase; $200 billion
• B)decrease; $200 billion
• C)increase; $160 billion
• D)decrease; $160 billion

Identify the elements of the marketing mix and their role in marketing strategy.

Understand market segmentation and the concept of customer value proposition.

Identify strengths, weaknesses, opportunities, and threats in different business scenarios.

Understand how a SWOT analysis can inform marketing decisions and strategic direction.

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Definitions:

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment or project, by calculating the difference between the present value of cash inflows and outflows over a period of time.

Profitability Index

A capital budgeting tool that measures the relative profitability of an investment by dividing the present value of its future cash flows by the initial investment cost.

Present Value

The present value of a future amount of money or series of cash flows, based on a given return rate.

Initial Investment

Initial investment refers to the capital amount spent to start a business venture, project, or purchase an asset.