Refer to the information provided in Figure 23.11 below to answer the question(s) that follow. Figure 23.11
-Refer to Figure 23.11. Equilibrium aggregate output will increase to $250 million if the
A) MPC increases to 0.8.
B) MPS increases to 0.8.
C) multiplier increases to 8.
D) all of the above.

Question

Refer to the information provided in Figure 23.11 below to answer the question(s) that follow.  Figure 23.11
-Refer to Figure 23.11. Equilibrium aggregate output will increase to $250 million if the
A) MPC increases to 0.8. 
B) MPS increases to 0.8. 
C) multiplier increases to 8. 
D) all of the above.

Quizplus · Accepted Answer

An increase in the marginal propensity to consume (MPC) to 0.8 would increase the multiplier effect, leading to a higher equilibrium aggregate output.

Refer to the Information Provided in Figure 23