Assume that the consumption function is C = 200 + 0.8Y. The marginal propensity to consume is:
A) 0.8.
B) 1.0.
C) 0.9.
D) 0.2.
Correct Answer:
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Q133: Q134: The presence of automatic stabilizers means that Q135: An increase in the price level will: Q136: During recessions, government spending usually: Q137: The multiplier for taxes can be calculated Q139: Assume there is no government or foreign Q140: Recall Application 4, "The Locomotive Effect: Why Q141: If the government collects taxes using a Q142: The level of consumption that does not Q143: Suppose consumption is $10,000 when income is
A)
A) decrease because
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