Suppose That MPC = 0

question 29

Multiple Choice

Suppose that MPC = 0.7 and MPI = 0.2. According to the Keynesian multiplier, a decrease of $20 million in government purchases will

• A)increase real GDP by $40 million.
• B)decrease real GDP by $40 million.
• C)increase real GDP by $100 million.
• D)decrease real GDP by $100 million.
• E)have no impact on real GDP.

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Definitions:

Assault

An intentional tort that prohibits any attempt or offer to cause harmful or offensive contact with another if it results in a well-grounded apprehension of imminent battery in the mind of the threatened person.

Threatens

Expressing or implying an intention to cause harm or negative consequences in order to influence someone's actions or decisions.

Nuisance

An act, condition, or thing that interferes with the use or enjoyment of property.

Trespass

An unauthorized entry on another’s property.