Multiple Choice
Suppose aggregate output is demand- determined. If the business community decreases its planned investment expenditures by $4 billion, causing equilibrium national income to fall by $20 billion, the marginal propensity to spend must be
A) 2/5.
B) 1/3.
C) 1/2.
D) 2/3.
E) 4/5.
Correct Answer:
Verified
Correct Answer:
Verified
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