If the MPC Equals 0

question 77

Multiple Choice

If the MPC equals 0.75,a $100 billion transfer payment decrease will decrease consumption in the first round by

• A)$25 billion.
• B)$75 billion.
• C)$100 billion.
• D)$400 billion.

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Definitions:

Self-Verification

A theory proposing that people seek to confirm their self-concept by preferring feedback and situations that are congruent with their existing beliefs about themselves.

Self-Esteem

An individual's subjective evaluation of their own worthiness and personal value.

Fear of Death

An emotional state characterized by anxiety or dread associated with the awareness of mortality and the inevitable process of dying.

Terror Management Theory

A psychological concept proposing that fear of death drives individuals to adopt cultural values and beliefs that provide meaning, purpose, and a sense of immortality.