Suppose aggregate output is demand- determined. If the business community decreases its planned investment expenditures by $4 billion, causing equilibrium national income to fall by $8 billion, the marginal propensity to spend must be
A)2/5.
B)1/3.
C)1/2.
D)2/3.
E)4/5.

Question

Quizplus · Accepted Answer

The Answer of Suppose aggregate output is demand- determined. If the business community decreases its planned investment expenditures by $4 billion, causing equilibrium national income to fall by $8 billion, the marginal propensity to spend must be
A)2/5.
B)1/3.
C)1/2.
D)2/3.
E)4/5.

Suppose Aggregate Output Is Demand- Determined