Suppose the MPC is 0.9 . If autonomous consumption spending increases by $20 billion, equilibrium output will
a. increase by $22.2 billion
b. increase by $200 billion
c. not change because the MPC only changes consumption when income changes
d. not change because the expenditures multiplier only applies to changes in investment spending and government purchases
e. increase by $18 billion
B
Economics
You might also like to view...
The real rate of interest
A) is equal to the nominal rate when Y equals YN. B) is equal to the nominal rate minus the rate of inflation. C) is equal to the nominal rate plus the rate of inflation. D) is never negative.
Economics
Microeconomics focuses on
A) the relationships among the different parts of the economy. B) the totals, or aggregates, of the economy. C) unemployment. D) business cycles.
Economics