D Question 26 1 pts Injecting new money into the economy eventually causes O stagflation. O unemployment. O arecession. inflation. deflation.
Homework Answers
We can develop following schedule on the basis of given information.
| Income | Consumption | MPC=Change in consumption/ Change in Income |
| 1000 | 900 | |
| 2000 | 1700 | 0.8 |
| 3000 | 2500 | 0.8 |
| 4000 | 3300 | 0.8 |
| 5000 | 4100 | 0.8 |
We can see that MPC is 0.8
Correct option is
0.80
26)
Price level is directly related to the nominal money supply. If money supply increases keeping other things the same, price will go up.
So, correct option is
inflation
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