ECON 211 The following facts apply to a small, imaginary economy
Question # 00330887
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Updated on: 07/03/2016 04:06 AM Due on: 07/03/2016

Scenario 21-2. The following facts apply to a small, imaginary economy.
• Consumption spending is $5,200 when income is $8,000. • Consumption spending is $5,536 when income is $8,400.
- Refer to Scenario 21-2. The marginal propensity to consume for this economy is
- 0.650.
- 0.659.
- 0.650 or 0.659, depending on whether income is $8,000 or $8,400.
- 0.840.
- Refer to Scenario 21-2. The multiplier for this economy is a. 6.00. b. 6.25. c. 8.40 d. 9.00.
- Refer to Scenario 21-2. For this economy, an initial increase of $500 in government purchases translates into a
- $1,428.57 increase in aggregate demand in the absence of the crowding-out effect.
- $3,125.00 increase in aggregate demand in the absence of the crowding-out effect.
- $1,428.57 increase in aggregate demand when the crowding-out effect is taken into account.
- $3,125.00 increase in aggregate demand when the crowding-out effect is taken into account.

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Solution: ECON 211 The following facts apply to a small, imaginary economy