An MPC of 0.80 means a $100 million transfer payment decrease:
A. Reduces consumption in the first round by $80 million.
B. Reduces consumption in the first round by $20 million.
C. Increases consumption in the first round by $20 million.
D. Increases consumption in the first round by $80 million.
Answer:A
An MPC of 0.80 means a $100 million transfer payment decrease:
A. Reduces consumption in the first round by $80 million. B. Reduces consumption in the first round by $20 million. C. Increases consumption in the first round by $20 million. D. Increases consumption in the first round by $80 million.