If the Multiplier Is 50, Then the Marginal Propensity to Consume

question 407

Multiple Choice

If the multiplier is 50, then the marginal propensity to consume (MPC) is

• A) 0.98.
• B) 0.05.
• C) 0.5.
• D) 9.

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Definitions:

Artificially Scarce Good

A product or service whose availability is limited due to artificial constraints, such as legal restrictions or monopolistic practices, rather than natural scarcities.

Competitive Market

A market structure where many firms offer products or services that are similar, allowing consumers to find substitutes easily.

Efficient Price

A market price that reflects all available information and results in an allocation of resources that maximizes overall utility.

Marginal Cost

The incurred cost from generating one more unit of a product or service.