Question
Assume that the marginal propensity to consume is equal to 0.85. If the government increased spending
by $Z, and the real GDP increased by $5000, what is the value of Z?
A)$750
B)$1000
C)$900
D)$800
Calculate the multiplier if the marginal propensity to consume (MPC) is equal to 0.99.
A)10000
B)1000
C)500
D)100
Suppose the government increases spending by $100, as a result real GDP will:
A)increase by less than $100.
B)increase by more than $100.
C)increase by $ 100.
D)none of the above.
If the marginal propensity to consume (MPC) is equal to 0.74, then the marginal propensity to save (MPS) is equal to:
A)0.25
B)0.26
C)0.2
D)0.1
Suppose the government increased spending by $100, and as a result real GDP increased by $2000. Calculate the marginal propensity to consume (MPC).
A)0.95.
B)0.9.
C)0.8.
D)0.7
Economics