Suppose That MPC = 0

question 103

Multiple Choice

Suppose that MPC = 0.8 and MPI = 0. According to the Keynesian multiplier, an increase of $20 million in government purchases will

• A)increase real GDP by $16 million.
• B)decrease real GDP by $16 million.
• C)increase real GDP by $100 million.
• D)decrease real GDP by $100 million.
• E)have no impact on real GDP.

---

Definitions:

Somatosensory

Relating to the body's sensory system that processes touch, temperature, pain, and proprioception.

Motor Systems

The components of the central and peripheral nervous system that are involved in the movement control of muscles.

CNS

The central nervous system, consisting of the brain and the spinal cord, which processes and transmits neural information.

Force

A physical quantity that represents the push or pull on an object, having both magnitude and direction, and is capable of causing changes in the motion of the object.