If the marginal propensity to consume is 0.75 and investment spending increases by $200 billion, by how much will equilibrium output increase? a. $350 billion b. $150 billion c. $200 billion d. $266.7 billion e. $800 billion

If the marginal propensity to consume is 0.75 and investment spending increases by $200 billion, by how much will equilibrium output increase? a. $350 billion b. $150 billion c. $200 billion d. $266.7 billion e. $800 billion

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

If the marginal propensity to consume is 0.75
and investment spending increases by $200
billion, by how much will equilibrium output
increase?
a. $350 billion
b. $150 billion
c. $200 billion
d. $266.7 billion
e. $800 billion

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