If the Multiplier Is 4, the Marginal Propensity to Consume

question 253

Multiple Choice

If the multiplier is 4, the marginal propensity to consume (MPC) must be

• A)0.25.
• B)0.5.
• C)0.75.
• D)1.

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Definitions:

Rent Subsidies

Financial assistance provided by the government or other organizations to help individuals or businesses afford the cost of renting property.

Wage Subsidies

Direct financial support from the government to employers or employees to encourage the hiring of workers or to maintain employment levels.

Price Controls

Price Controls are governmental restrictions on the prices that can be charged for goods and services in a market, aiming to curb inflation and ensure affordability.

Binding Minimum Wage

A set wage minimum by the government that is above the equilibrium wage, leading to potential excess supply of labor, or unemployment.