If Government Increases Its Purchases by $15 Billion and the MPC

question 193

Multiple Choice

If government increases its purchases by $15 billion and the MPC is 2/3, then we would expect the equilibrium GDP to

• A)increase by $30 billion.
• B)increase by $45 billion.
• C)decrease by $35 billion.
• D)increase by $50 billion.

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Definitions:

Split-Second Fear

A rapid, automatic fear response to a perceived threat, occurring in a fraction of a second.

Unconscious

Pertaining to the part of the mind that is inaccessible to the conscious mind but influences behaviors, thoughts, and feelings.

Neural Processing

The method by which the nervous system receives, interprets, and responds to signals from the sensory organs or other neural inputs.

Automatic Emotional Responses

Immediate and unconscious emotional reactions to certain stimuli or situations without deliberate thought.