If the Marginal Propensity to Consume Is 0

question 105

Multiple Choice

If the marginal propensity to consume is 0.75,and there is no investment accelerator or crowding out,a $15 billion increase in government expenditures would shift the aggregate demand curve right by

• A)$60 billion,but the effect would be larger if there were an investment accelerator.
• B)$60 billion,but the effect would be smaller if there were an investment accelerator.
• C)$45 billion,but the effect would be larger if there were an investment accelerator.
• D)$45 billion,but the effect would be smaller if there were an investment accelerator.

---

Definitions:

Corporate Rate

A specially negotiated price for services, typically offered to businesses or organizations for their employees or members.

Revenue Management

An economic strategy to optimize income by predicting consumer behavior at the micro-market levels and adjusting product availability and price.

Goods Combinations

The mix of different products or services that a company offers, taking into account how different items complement or substitute for one another.

Standard Deviation

A measure of the dispersion or variation in a set of values, indicating how much the values deviate from the mean of the set.