Suppose the marginal propensity to consume (MPC) equals 0.80, an increase in autonomous investment of $100 will lead to an increase in real Gross Domestic Product (GDP) by
A) $100.
B) $400.
C) $500.
D) $800.
Answer: C
Suppose the marginal propensity to consume (MPC) equals 0.80, an increase in autonomous investment of $100 will lead to an increase in real Gross Domestic Product (GDP) by
A) $100.
B) $400.
C) $500.
D) $800.
Answer: C