Multiple Choice
The diagram below shows desired aggregate expenditure for a hypothetical economy.Assume the following features of this economy: • marginal propensity to consume (mpc) = 0.75
• net tax rate (t) = 0.20
• no foreign trade
• fixed price level
• all expenditure and income figures are in billions of dollars. 
FIGURE 22-2
Refer to Figure 22-2.What is the marginal propensity to spend (z) in this economy?
A) 0.15
B) 0.20
C) 0.40
D) 0.60
E) 0.75
Correct Answer:
Verified
Correct Answer:
Verified
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