Solved

Suppose the Marginal Propensity to Consume (MPC) Is 0

Question 206

Multiple Choice

Suppose the marginal propensity to consume (MPC) is 0.8 and there is a $2,000 increase in planned investment. Given this information, real GDP will increase by


A) $4,000.
B) $20,000.
C) $50,000.
D) $200,000.

Correct Answer:

verifed

Verified

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

Related Questions

Q201: Suppose that when disposable income increases by

Q202: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB5018/.jpg" alt=" Note: Amounts in

Q203: In Keynesian analysis, if investment does NOT

Q204: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB5018/.jpg" alt=" -Refer to the

Q205: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB5018/.jpg" alt=" -In the above

Q207: If the marginal propensity to save (MPS)

Q208: When Monica spends more than her disposable

Q209: The investment function would shift outward to

Q210: If the multiplier is 20 and income

Q211: The investment function is represented by<br>A) an