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The marginal propensity to consume

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1. The marginal propensity to consume is defined as:


Î"Yd/Î"S + Î"Yd/Î"S = 1

2. Over time Americans have chosen to cook less at home and dine out more. This change in behavior:

does not affect GDP.

increases GDP.

reduces GDP.

none of the above

all of the above

3. The falling phase of a business cycle measured by a decrease in real GDP is called:
diminishing returns

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