11.The multiplier is:A.1 / (1 – MPC)B.MPS/ MPCC.1 / (MPC).D.1(1 + MPC).Answer:A

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12.If the MPCis 0.8, then the multiplier is:

13.The marginal propensity to consume (MPC) is equal to the change in:

14.If disposable income increases by $5 billion and consumer spending increases by $4 billion, themarginal propensity to consume is equal to:

15.Suppose the marginal propensity to consume is equal to 0.9 and investment spending increasesby $50 billion. Assuming no taxes and no trade, by how much will real GDP change?A.$450 billion increaseB.$90 billion increaseC.$500 billion increaseD.$500 billion decreaseAnswer:C

16.The spending multiplier is equal to:

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17.Suppose that a financial crisis decreases investment spending by $100 billion and the marginalpropensity to consume is 0.8. Assuming no taxes and no trade, by how much will real GDPchange?

18.The MPCis the:

19.If your disposable income increases from $10,000 to $15,000 and your consumption increasesfrom $9,000 to $12,000, your MPCis:A.0.2.B.0.4.C.0.6.D.0.8.Answer:C

20.If your disposable personal income increases from $10,000 to $15,000 and your consumptionincreases from $9,000 to $13,000, your MPCis:

21.The MPCplus the MPSmust:

22.The value of MPCis:

23.An increase in the MPC:A.increases the multiplier.B.shifts the autonomous investment line upward.C.decreases the multiplier.D.shifts the autonomous investment line downward.Answer:A

24.Which of the following most accurately depicts the formula for the expenditure multiplier?