Exhibit 13.1 Assume the Marginal Propensity to Consume for U.S.households Equals 0.9,and

question 92

Multiple Choice

Exhibit 13.1
Assume the marginal propensity to consume for U.S.households equals 0.9,and the marginal propensity to import for the United States equals 0.1.Suppose there occurs an increase in investment of $10 billion at each level of income.
-Refer to Exhibit 13.1.The value of the multiplier for the United States equals:

• A) 2
• B) 3
• C) 4
• D) 5

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Definitions:

Price-Earnings Ratio

A ratio used to value a company that measures its current share price relative to its per-share earnings.

Market Price

The current price at which an asset or service can be bought or sold in a particular market.

Earnings per Share

A financial indicator showing the portion of a company's profit allocated to each outstanding share of common stock.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, calculated by dividing current assets by current liabilities.