A decrease in autonomous investment of $100 that occurs when the marginal propen

Question

A decrease in autonomous investment of $100 that occurs when the marginal propensity to save (MPS) equals 0.25 will lead to a decrease in real GDP of $25. $100. $400. $800. A decrease in autonomous investment of $100 that occurs when the marginal propensity to save (MPS) equals 0.25 will lead to a decrease in real GDP of $25. $100. $400. $800. A decrease in autonomous investment of $100 that occurs when the marginal propensity to save (MPS) equals 0.25 will lead to a decrease in real GDP of $25. $100. $400. $800. $25. $100. $400. $800. $25. $100. $400. $800.

Explanation / Answer

answer c $400

EXPLANATION the value of multiplier is 4 because k=1/0.25=4 so decrease in autonomous investment by $100 will result in 4*100=$400 decrease in real GDP

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