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If the Marginal Propensity to Consume (MPC)is Equal to 0

Question 101

Multiple Choice

If the marginal propensity to consume (MPC) is equal to 0.9,an increase in household income causes desired consumption expenditure to


A) rise by more than the increase in income.
B) rise by the full increase in income.
C) rise by less than the full increase in income.
D) fall,as an increase in income will increase saving.
E) remain constant,because the MPC is also constant.

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