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Ultimate Flashcard Review
Video
Multipliers
Key Concepts to Understand
Question 1 of 4
If a household receives an additional $1,000 of income and chooses to spend $700 and save $300, what is its Marginal Propensity to Save (MPS)?
0.3
0.7
3.33
1.42
Practice Questions: Test Your Understanding
Apply what you've learned with these practice questions. These questions test your understanding of the key concepts.
Question 1 of 3
If the marginal propensity to save (MPS) is 0.2, and the government increases spending by $100 billion with no change in taxes, what is the maximum possible change in real GDP?
Increase by $50 billion
Decrease by $100 billion
Increase by $200 billion
Increase by $400 billion
Increase by $500 billion
Key Takeaways
- 📊Master the fundamentals: Understanding these core concepts is essential for success in AP Economics.
- ✅Practice makes perfect: Use the interactive exercises and practice questions to reinforce your understanding.