Assume That the Marginal Propensity to Expend Is 0

question 29

Essay

Assume that the marginal propensity to expend is 0.75 and therefore the multiplier is 4.According to the multiplier model,an increase in autonomous exports of 100 would raise the equilibrium level of income by 400.Explain how the multiplier process amplifies the initial shift in autonomous expenditures.

---

Definitions:

Prevent Trespass

Actions or measures taken to stop unauthorized entry or infringement on one's property.

Property Law

The area of law that governs the various forms of ownership and tenancy in real property (land as distinct from personal or movable possessions) and in personal property, within the common law legal system.

Dispose

To get rid of something, typically by throwing away or giving it away.

Type, Grade, Quantity

Specifications that define the quality and amount of materials or goods required for a particular purpose or contract.