If $1,000 of Additional Spending Occurs (From Investment,say)and the Marginal

question 71

Multiple Choice

If $1,000 of additional spending occurs (from investment,say) and the marginal propensity to consume is 0.8,the total effect on the economy is an increase of _____ in income or output.

• A) $800
• B) $1,000
• C) $5,000
• D) $8,000

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Definitions:

Smooth

Characteristic of muscles that perform involuntary movements, found in the walls of internal organs.

Arms

Upper limbs of the human body, extending from the shoulders to the hands, used for grasping and manipulation.

Ascending Pathway

Neural paths that transmit sensory information from the body to the brain.

Secondary Neuron

A neuron that receives a synaptic input from primary neurons and transmits the signal to other neurons or muscles.