Given an MPC of 0

question 225

Multiple Choice

Given an MPC of 0.80, if there are no income taxes or imports and prices are constant, then when investment increases by $50 million, when prices are fixed equilibrium GDP would

• A) increase by $250 million.
• B) increase by $400 million.
• C) increase by $50 million.
• D) To answer the question more information on income is needed.

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Definitions:

Relevant Market

The market segment in which a particular company's product or service competes, including potential customers and competing products.

DuPont

A multinational corporation known for its development of polymers, chemicals, and agricultural products.

Trustbusters

Individuals or government entities that work to prevent or break up monopolies and trusts, aiming to encourage competition in the marketplace.

Alcoa Case

A landmark antitrust case in the United States that significantly expanded the concept of monopolistic practices and market domination by the Aluminum Company of America.