Solved

If Autonomous Investment Spending Falls by $1,000 and the Marginal

Question 223

Multiple Choice

If autonomous investment spending falls by $1,000 and the marginal propensity to consume is 0.75, the total effect on the economy is a decrease of _____ in income or output.


A) $750
B) $1,000
C) $4,000
D) $7,500

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q218: The marginal propensity to consume plus the

Q219: If consumption falls from $600 billion to

Q220: At equilibrium, if spending increases by $1,200

Q221: The spending reduction necessary to bring an

Q222: Aggregate expenditures is equal to C +

Q224: In the simple Keynesian model, the only

Q225: The Keynesian conclusion that total injections equal

Q226: Assume the economy is currently experiencing aggregate

Q227: How does the simple Keynesian model differ

Q228: (Table: Consumption and Savings) Based on the