Multiple Choice
If the marginal propensity to consume (MPC) in your classmate's nation is 3/5 and the marginal propensity to save (MPS) in your country is 1/10,which of the following must be true?
A) The spending multiplier is larger in your classmate's nation than in your country.
B) The spending multiplier is smaller in your classmate's nation than in your country.
C) Autonomous consumption is higher in your classmate's nation than in your country.
D) Autonomous consumption is lower in your classmate's nation than in your country.
E) Total consumption is lower in your classmate's nation than in your country.
Correct Answer:
Verified
Correct Answer:
Verified
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