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Suppose That When Disposable Income Decreases by $2,000, Consumption Spending

Question 299

Multiple Choice

Suppose that when disposable income decreases by $2,000, consumption spending increases by $1500. Given this information, we know that the marginal propensity to consume (MPC) is


A) ) 25.
B) ) 75.
C) $1,000/$750 = 1.33.
D) 1/.25 = 4.

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