Home / Questions / If the marginal propensity to consume is 0.8, the multiplier will be A) 0.8. B) 1. C)
If the marginal propensity to consume is 0.8, the multiplier will be
A) 0.8.
B) 1.
C) 4.
D) 5.
102) If the marginal propensity to save is 0.1, the multiplier will be
A) 0.1.
B) 1.
C) 5.
D) 10.
103) If the multiplier in the economy is 3, the marginal propensity to save must be
A) 0.33.
B) 0.67.
C) 1.
D) 3.
104) If the multiplier is 4, the marginal propensity to consume must be
A) 0.25.
B) 0.5.
C) 0.75.
D) 1.
105) If the marginal propensity to consume is 0.8 and the real national income needs to be increased by $500 billion, then
A) consumption spending needs to increase by $500 billion.
B) saving needs to be reduced by $500 billion in order to generate the extra $500 billion.
C) an increase in investment spending of $200 billion is needed to generate the desired increase of $500 billion.
D) an increase in autonomous spending of $100 billion will lead to the increase of $500 billion.
106) If the MPS increases, the multiplier
A) decreases.
B) increases.
C) stays the same.
D) can either increase or decrease depending on what happens to the MPC.
107) If the MPS = 0.33, a $100 increase in net exports will
A) reduce national income by $100.
B) reduce national income by $300.
C) increase national income by $33.
D) increase national income by $300.
108) If the MPC out of real national income equals 0.75, then
A) for every $100 increase in consumption, real national income increases by $75.
B) consumption is always more than national income.
C) for every $100 increase in real national income, saving increases by $75.
D) for every $100 increase in real national income, saving and taxes paid increase by $25.
109) The larger the MPC,
A) the larger the multiplier.
B) the smaller the multiplier.
C) the smaller the slope of the consumption function.
D) the larger the slope of the savings function.
110) If the MPC decreases, then
A) the MPS decreases.
B) the multiplier decreases.
C) the multiplier increases.
D) MPC + MPS is less than 1.
Dec 07 2019 Read more Less More
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