Suppose That in an Economy with a MPC of

question 96

Multiple Choice

Suppose that in an economy with a MPC of .5 the government wanted to shift the aggregate demand curve rightward by $80 billion at each price level to expand real GDP.It could:

• A)reduce taxes by $160 billion.
• B)increase government spending by $80 billion.
• C)reduce taxes by $40 billion.
• D)increase government spending by $40 billion.

Appreciate the importance of well-constructed conclusions for reinforcing essay messages.

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Definitions:

Amino Acids

Organic compounds serving as the building blocks of proteins, necessary for various biological functions.

Major Lobes

The divisions of the brain, including the frontal, parietal, occipital, and temporal lobes, each responsible for different functions.

Liver

A vital organ in vertebrates which performs functions such as detoxification, protein synthesis, and production of biochemicals necessary for digestion.

Diaphragm

Musculomembranous partition between the abdominal and thoracic cavities.