Suppose the Marginal Propensity to Consume (MPC) Is 0

question 415

Multiple Choice

Suppose the marginal propensity to consume (MPC) is 0.8 and there is a $1,000 increase in autonomous consumption. Given this information, real GDP will increase by

• A) $1,600.
• B) $2,000.
• C) $2,500.
• D) $5,000.

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Definitions:

Adult Supervision

The oversight provided by an adult to monitor, guide, and ensure the safety and well-being of children or teenagers during certain activities or environments.

Peer Group

A group of individuals, usually of a similar age, background, or social status, with whom a person associates and identifies.

Mass Media

Various mediums of communication, such as television, radio, newspapers, and the internet, used to disseminate information to large audiences.

Average Life Expectancy

An estimate of the average number of years an individual or group of people is expected to live, based on statistical averages.