Assume the MPC Is 0

question 87

Multiple Choice

Assume the MPC is 0.75.To eliminate an AD shortfall of $200 billion,the government should

• A)Decrease spending by $50 billion.
• B)Increase spending by $50 billion.
• C)Increase taxes by $66.7 billion.
• D)Increase spending by $800 billion.

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Definitions:

Domestic Corporations

Companies that are incorporated (i.e., formed under the corporate laws) in and operate within the country in which they were founded.

Board of Directors

A group of individuals elected to represent shareholders and govern the affairs of a corporation.

Finalize Deal

To complete the negotiations and formal agreements of a business transaction, making it official and binding.

Asset Sale

The process of selling off individual assets of a company, such as real estate, machinery, or intellectual property, rather than transferring ownership of the company itself.