If a $1,000 Increase in Income Leads to an $800

question 77

Multiple Choice

If a $1,000 increase in income leads to an $800 increase in consumption expenditures,then the marginal propensity to consume is

• A)0.2 and the multiplier is 1.25.
• B)0.8 and the multiplier is 5.
• C)0.2 and the multiplier is 1.25
• D)0.8 and the multiplier is 8.

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Definitions:

Binge Drinkers

Individuals who consume a large amount of alcohol in a short period, typically defined as five or more drinks for men, and four or more for women, in about two hours.

Ethnic Group

A community or population made up of people who share a common cultural background or descent.

Binge Drinking

The consumption of an excessive amount of alcohol in a short period, leading to acute intoxication.

18th Amendment

An addition to the United States Constitution that prohibited the manufacture, sale, or transportation of alcoholic beverages, later repealed by the 21st Amendment.