Asked by
Jasmine Dutra
on Dec 16, 2024Verified
If the marginal propensity to consume (MPC) equals 0.9,the multiplier is _____.
A) 1
B) 2
C) 5
D) 10
E) 12
Marginal Propensity
The rate at which an individual, household, or economy is likely to consume (or save) with respect to an incremental increase in income.
Multiplier
An economic factor that quantifies the impact of increased spending in the economy, leading to a proportional increase in income and consumption.
- Measure and apprehend the significance of the rudimentary spending multiplier in light of the marginal propensity to consume and save.
- Understand the relationship between the marginal propensity to consume (MPC) and the spending multiplier.
Verified Answer
CC
Learning Objectives
- Measure and apprehend the significance of the rudimentary spending multiplier in light of the marginal propensity to consume and save.
- Understand the relationship between the marginal propensity to consume (MPC) and the spending multiplier.
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