Assume the marginal propensity to consume is 0.8. If consumer spending rises by $20 billion, then total income through the multiplier effect will: Increase by $100 billion Decrease by $100 billion Increase by $10 billion Will not change How do I calculate this?
Assume the marginal propensity to consume is 0.8. If consumer spending rises by $20 billion, then total income through the multiplier effect will: Increase by $100 billion Decrease by $100 billion Increase by $10 billion Will not change How do I calculate this?
Chapter19: The Keynesian Model In Action
Section: Chapter Questions
Problem 11SQ
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Assume the marginal propensity to consume is 0.8. If consumer spending rises by $20 billion, then total income through the multiplier effect will:
-
Increase by $100 billion
-
Decrease by $100 billion
-
Increase by $10 billion
-
Will not change
How do I calculate this?
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