Suppose the MPC in the Economy in Figure 10

question 89

Multiple Choice

Suppose the MPC in the economy in Figure 10.2 equals 0.5 and the shift from AD₀ to AD₁ was caused by a decrease in consumption of $12 billion.What will the total decrease in aggregate demand be (for example,AD₀ to AD₂) as a result of the initial $12 billion decrease?

• A)$12 billion because there are no multiplier effects associated with a change in consumption.
• B)$600 billion.
• C)$24 billion.
• D)$60 billion.

---

Definitions:

Innovative Ideas

Novel concepts or proposals that have the potential to bring about significant changes or improvements in a specific field.

Process Innovation

The introduction of new or significantly improved methods in the production or delivery of goods and services.

Gatekeeper

A gatekeeper is an individual or entity that controls access to something, such as information or resources, effectively acting as a filter.

Boundary Spanner

An individual within an organization who facilitates communication and coordination with external entities or across different organizational units.