In an economy, the marginal propensity to consume is 0.75. All other things being equal, which one of the following statements is correct?
If injections into the circular flow of income rise by £8 billion, national income will rise by £6 billion.
A £40 billion reduction in the economy's national income will result in a £30 billion fall in consumption.
When the economy's income equals £200 billion, total consumption will equal £150 billion.
If injections into the circular flow of income rise by £10 billion, national income will rise by £12.5 billion.
