If the marginal propensity to consume in an economy is 0.8, net exports are zero, and government spending is $33 billion at each level of real GDP, the slope of the economy's aggregate expenditures schedule will be
A)0.8.
B)0.2.
C)5.
D)0.125.

Question

Quizplus · Accepted Answer

The slope of the aggregate expenditures schedule is equal to the marginal propensity to consume. In this case, the marginal propensity to consume is 0.8, so the slope of the aggregate expenditures schedule will be 0.8.

If the Marginal Propensity to Consume in an Economy Is