If the Marginal Propensity to Consume Is 4/5, the Multiplier

question 43

Multiple Choice

If the marginal propensity to consume is 4/5, the multiplier is:

• A)​20.
• B)​5.
• C)​1.
• D)​1/5.

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Definitions:

Pre-tax Net Annual Savings

The amount of money saved annually before taxes, often resulting from implementing cost-saving measures or efficiency improvements.

Bank Loan

A sum of money lent at interest by a bank to a borrower, usually on collateral security, for a certain period.

Collection Float

The time period between when a check is deposited and when the funds are made available.

Chequing Account

A bank account from which money can be withdrawn without notice, typically used for day-to-day spending and bill payments.