If the marginal propensity to consume is 0.75, net taxes are fixed at $2,000, and real income rises by $12,000, by how much will real consumption spending increase? a. $12,000 b. $7,500 c. $9,000 d. $7,000 e. $8,000

If the marginal propensity to consume is 0.75, net taxes are fixed at $2,000, and real income rises by $12,000, by how much will real consumption spending increase? a. $12,000 b. $7,500 c. $9,000 d. $7,000 e. $8,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

If the marginal propensity to consume is 0.75, net taxes are fixed at $2,000, and real income rises by $12,000, by how much will real consumption spending increase?

	a.	$12,000
	b.	$7,500
	c.	$9,000
	d.	$7,000
	e.	$8,000

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Explanation
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