If the MPC Is

question 45

Multiple Choice

If the MPC is .70 and gross investment increases by $3 billion, the equilibrium GDP will:

• A)increase by about $10 billion.
• B)increase by $2.10 billion.
• C)decrease by $4.29 billion.
• D)increase by $4.29 billion.

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Definitions:

Encoding Failure

A situation in which information does not enter the brain's long-term memory and is thus forgotten.

Sensory Memory

The shortest-term element of memory that allows individuals to retain impressions of sensory information after the original stimuli have ended.

Storage

The act of maintaining and holding information in the brain for future retrieval.

Retroactive Interference

A phenomenon where newly learned information interferes with the recall of previously learned information.