If the Marginal Propensity to Save Is 0

question 306

Multiple Choice

If the marginal propensity to save is 0.25, investment spending is $700 million, and the government increases its purchases of goods and services by $100 million, then real GDP increases by:

• A)$25 million.
• B)$175 million.
• C)$400 million.
• D)$2,800 million.

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Definitions:

Erythema

Redness of the skin or mucous membranes, often caused by dilation and congestion of the capillaries, typically a sign of inflammation or infection.

Ecchymosis

The appearance of a large, discolored area on the skin, caused by bleeding underneath, typically resulting from bruising.

Skin Mobility

The ease with which skin can be moved or lifted, often assessed in the evaluation of edema, dehydration, or certain skin conditions.