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###### Suppose the marginal propensity to consume if 0.75 and autonomous consumption (consumption at zero income) is...

Suppose the marginal propensity to consume if 0.75 and autonomous consumption (consumption at zero income) is $4,000. If income is $50,000, consumption spending is a. $37,500 b. $41,500 C. $45,500 d. $54,000 QUESTION 4 If the consumption function for an economy is C = 180 + 75 Yd (disposable income) and spending increases by $800, then the resulting change in national income is a. +$2,800 OOO b. 5-3,200 c. $-2,800 d. $+3,200 QUESTION 5 Assume the actual GDP is $4800 and the potential GDP is $4400. The economy's MPC is.75. What should the government do to eliminate the gap? a. raise taxes by $100 b. cut taxes by $75 C. increase government spending by $100 d. decrease government spending by $100

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