If the MPC Is 3/5 Then the Multiplier Is

question 33

Multiple Choice

If the MPC is 3/5 then the multiplier is

• A)4, so a $100 increase in government spending increases aggregate demand by $400.
• B)1.5, so a $100 increase in government spending increases output by $150.
• C)2.5, so a $100 increase in government spending increases aggregate demand by $250.
• D)1.67, so a $100 increase in government spending increases output by $166.67.

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Definitions:

Seller and Lessor

Terms referring to parties in transactions where goods are sold (seller) or property is leased (lessor) to another party.

Specific Performance

A legal remedy in contract law requiring the breaching party to fulfill the exact terms of the contract, rather than merely compensating the aggrieved party with damages.

Sale of Goods

A transaction in which property consisting of tangible personal items is transferred from seller to buyer for a price.

Reselling the Defective Fixtures

The act of selling goods that have flaws or defects not corrected by the seller, often at a reduced price.