If the MPC Is 0

question 107

Multiple Choice

If the MPC is 0.4, the MPI is 0.2, and the government increases spending by $50 million, what will be the demand for goods and services generated by this increase?

• A) $20 million
• B) $30 million
• C) $125 million
• D) $250 million

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Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price within a specified time period.

Coca-Cola

A multinational beverage corporation known for its flagship product, a carbonated soft drink.

Pepsi

A carbonated soft drink produced and manufactured by PepsiCo, serving as a major competitor in the global beverage market.

Market Demand Curve

A graphical representation that shows the relationship between the price of a good and the total quantity demanded by all consumers in the market.