Assume That the MPC Is 0

question 54

Multiple Choice

Assume that the MPC is 0.8. If government purchases increase by $500, equilibrium output ________; and if taxes increase by $500, equilibrium output ________.

• A) increases by $2,500; decreases by $2,000
• B) increases by $4,000; decreases by $3,000
• C) increases by $2,000; decreases by $1,000
• D) increases by $1,600; decreases by $1,200

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Definitions:

Free Speech Rights

The guaranteed rights, primarily under the First Amendment of the U.S. Constitution, that protect individuals' freedom to communicate ideas and information without governmental restriction.

At-Will Employment

An employment arrangement where either the employer or the employee can terminate the employment at any time for any reason, except an illegal one.

Whistleblowing

The act of exposing any kind of information or activity that is deemed illegal, unethical, or not correct within an organization, either private or public, by an insider.

At-Will Employment

An employment arrangement in which an employee can be dismissed by an employer for any reason (that is not illegal) and without warning, just as the employee can leave their job without reason or warning.