Assume That the Marginal Propensity to Consume in an Economy

question 133

Multiple Choice

Assume that the marginal propensity to consume in an economy is 0.75. If the economy's full-employment real GDP is $900 billion and its equilibrium real GDP is $800 billion, there is a recessionary expenditure gap of:

• A) $25 billion
• B) $100 billion
• C) $133 billion
• D) $400 billion

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Definitions:

Social Skills

The abilities necessary for effective interpersonal behaviors and communication, such as empathy, cooperation, and active listening.

Autism Spectrum Disorder

A range of neurodevelopmental conditions characterized by challenges with social skills, repetitive behaviors, speech, and nonverbal communication.

Medicaid-insured

A status denoting individuals who are covered by Medicaid, a government-funded program in the United States that provides health insurance to people with low income.

Non-Hispanic White

An ethnic or racial category in the United States Census referring to people who are not of Hispanic or Latino origin and identify as White.