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.

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Definitions:

Adaptation

The process through which individuals, species, or organizations adjust and change in response to new conditions or challenges.

Mourning

The process of expressing grief and adapting to loss, typically associated with the death of a loved one but can also relate to other significant losses.

Networked Workstations

A collection of computers interconnected via a communication network, enabling users to work collaboratively or access shared resources.

Groupware

Software designed to enable multiple users to collaborate and share information electronically in a flexible, interactive environment.