Multiple Choice
Consider the simplest macro model in which aggregate output is demand-determined.If autonomous consumption increases by $2 billion causing equilibrium national income to rise by $6 billion,the marginal propensity to spend must be
A) 1.0.
B) 0.5.
C) 0.2.
D) 0.67.
E) 3.0.
Correct Answer:
Verified
Correct Answer:
Verified
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