Suppose That MPC = 0

question 103

Multiple Choice

Suppose that MPC = 0.8 and MPI = 0. According to the Keynesian multiplier, an increase of $20 million in government purchases will

• A)increase real GDP by $16 million.
• B)decrease real GDP by $16 million.
• C)increase real GDP by $100 million.
• D)decrease real GDP by $100 million.
• E)have no impact on real GDP.

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Definitions:

Token Economy

A behavior modification system that utilizes tokens as a form of currency that can be exchanged for desired rewards or privileges, aimed at increasing desirable behaviors.

Community Living

A residential living arrangement that offers a supportive, structured environment for individuals, particularly those with disabilities or special needs, to foster independence and social interaction.

Institutional Setting

An environment or facility designed for specific purposes such as healthcare, education, or incarceration, where structured routines and regulations are in place.

Token Economy

A behavior modification method often used in therapeutic settings, where desired behaviors are rewarded with tokens that can be exchanged for various rewards.