Multiple choice

Induced investment is related to

  1. marginal propensity to consume

  2. marginal propensity to save

  3. marginal efficiency of capital

  4. government

  5. marginal utility
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Induced investment is investment expenditures by the business sector that are based on the level of income or production. The marginal propensity to save is the fraction of an increase in income that is not spent on an increase in consumption.

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