If the marginal propensity to save is 0.40, a $20 billion increase in investment spending would cause equilibrium output to:
A)increase by $50.
B)increase by $80.
C)decrease by $33.
D)decrease by $40.
E)decrease by $20.

Question

Quizplus · Accepted Answer

The Answer of If the marginal propensity to save is 0.40, a $20 billion increase in investment spending would cause equilibrium output to:
A)increase by $50.
B)increase by $80.
C)decrease by $33.
D)decrease by $40.
E)decrease by $20.

If the Marginal Propensity to Save Is 0