If the marginal propensity to save is 0.2 in a private closed economy, a $20 billion rise in investment spending will increase:
A) GDP by $120 billion.
B) GDP by $20 billion.
C) saving by $25 billion.
D) consumption by $80 billion.
Correct Answer:
Verified
Q170: The size of the simple multiplier is
Q171: The simple multiplier is:
A)1/APS.
B)1/APC.
C)1/MPC.
D)1/MPS.
Q172: The simple multiplier is:
A)1/MPC.
B)1/(1 + MPC).
C)1/MPS.
D)1/(1 -
Q173: Q174: If the MPS is only half as Q176: The following table illustrates the multiplier process Q177: If the MPC is .70 and gross
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