Suppose the MPC Is 0

question 63

Multiple Choice

Suppose the MPC is 0.8 in Canada and the MPC_h is 0.55. If income increases by $100 million in Canada, then the increase in consumption of foreign goods will be:

• A) $35 million.
• B) $25 million.
• C) $80 million.
• D) $100 million.

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Definitions:

Primary groups

Small social groups characterized by close, personal, and enduring relationships, such as family or close friends.

Long-term

Pertaining to a prolonged period of time, often extending beyond what is usual or expected.

Intimate relationships

Deeply personal connections between individuals characterized by emotional attachment, love, trust, and ongoing personal interaction.

Group dynamics

The study of the behavioral interactions and psychological processes occurring within a social group.