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Assume That the MPC Is 0

question 5

Multiple Choice

Assume that the MPC is 0.8. Assuming that only the multiplier effect matters, how will a decrease in government purchases of $150 billion shift the aggregate demand curve?


Definitions:

Acculturation Policy

A policy designed to facilitate the adoption of certain cultural attributes of one group by another, often in the context of immigration or colonization.

Healthy Immigrant Effect

Immigrants’ health is generally better than the health of those born in Canada, but this declines as their years spent living in Canada increase.

Type 2 Diabetes

A chronic condition that affects the way the body processes blood sugar (glucose), characterized by high blood sugar, insulin resistance, and a relative lack of insulin.

Heart Disease

A range of conditions that affect the heart, including coronary artery disease, heart rhythm problems (arrhythmias), and heart defects one is born with, among others.

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