If a $2000 increase in income leads to an $1600 increase in consumption expenditures, then the marginal propensity to consume is Select one: a. 0.2 and the multiplier is 1.25. b. 0.2 and the multiplier is 1.25. c. 0.8 and the multiplier is 5. d. 0.8 and the multiplier is 8.
If a $2000 increase in income leads to an $1600 increase in consumption expenditures, then the marginal propensity to consume is Select one: a. 0.2 and the multiplier is 1.25. b. 0.2 and the multiplier is 1.25. c. 0.8 and the multiplier is 5. d. 0.8 and the multiplier is 8.
Chapter18: The Keynesian Model
Section: Chapter Questions
Problem 7SQ
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