If the marginal propensity to consume for a nation is 0.8, it means:
a. consumers save 80% of their incomes.
b. consumers spend 80% of their incomes.
c. consumers pay 20% tax on their earnings.
d. consumers decrease their spending by $0.80 for each $1 of a decrease in their income.
Ans: d. consumers decrease their spending by $0.80 for each $1 of a decrease in their income.
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