If a $1,000 increase in income leads to an $800 increase in consumption expenditures, then the marginal propensity to consume is

a. 0.2 and the multiplier is 1.25.
b. 0.8 and the multiplier is 5.
c. 0.2 and the multiplier is 1.25.
d. 0.8 and the multiplier is 8.


b

Economics

You might also like to view...

Compensating differentials are

A) non-monetary benefits from being employed, such as health-care benefits. B) higher wages that compensate the more experienced workers in a field. C) wages paid to workers where the supply of labor is great relative to demand. D) higher wages that compensate workers for unpleasant aspects of a job.

Economics

Joel buys ten disks for his new personal computer, and he places a $60 value on those disks, even though he only paid $2 per disk. What is his consumer surplus?

a. $48 b. $30 c. $40 d. $20 e. $4 from each floppy disk

Economics

Cleaning an environment may lead to

a. less production. b. higher prices. c. lower incomes. d. all of the above.

Economics

An example of a negative externality created in the market system would be

A) poverty. B) unemployment. C) a change in one consumer's tastes and preferences. D) water pollution.

Economics