# The multiplier is a 1 1 mpc b mps mpc c 1 mpc d 11

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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:
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