If the Marginal Propensity to Save Is 0

question 363

Multiple Choice

If the marginal propensity to save is 0.25, investment spending is $600 million, and the government increases its transfers by $100 million, then real GDP increases by:

• A)$25 million.
• B)$150 million.
• C)$300 million.
• D)$1,800 million.

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Definitions:

Open Sentences

Mathematical or logical sentences containing one or more variables that can be made true or false depending on the values of those variables.

Scope

The extent or range of view, understanding, or application of a subject or concept.

Truth-Functional Compound

A logical compound statement whose truth value is determined solely by the truth values of its components.

Quantifier

A logical term used to specify the quantity of specimens in the domain of discourse that satisfy an open sentence.