If the MPC Is

question 174

Multiple Choice

If the MPC is.50, all taxes are lump-sum taxes, and the equilibrium GDP is $40 billion below the full-employment GDP, then the size of the recessionary expenditure gap:

• A)is $40 billion.
• B)is $20 billion.
• C)is $60 billion.
• D)cannot be determined from the information given.

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Definitions:

Adoption

In corporation law, a corporation’s acceptance of a preincorporation contract by action of its board of directors, by which the corporation becomes liable on the contract.

Novation

The act of replacing one obligation with a new one, extinguishing the original obligation.

Ratification

Ratification is the formal approval or confirmation of an action or agreement, often used in the context of treaties, contracts, or laws.

Promoters

Individuals or companies responsible for establishing a corporation or business venture, including raising capital and completing legal formalities.