Assume an Economy with an Upward-Sloping Aggregate Supply Curve and an MPC

question 182

Multiple Choice

Assume an economy with an upward-sloping aggregate supply curve and an MPC of .80.An increase in investment spending of $50 billion will most likely increase total income by

• A)$200 billion.
• B)$40 billion.
• C)more than $200 billion.
• D)more than $50 billion but less than $250 billion.

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Definitions:

Behaviorism

A psychological approach that emphasizes the study of observable behaviors rather than internal mental states, and the effects of environmental stimuli on those behaviors.

Animal Intelligence

The capacity of animals to process information, learn from experience, solve problems, and adapt to their environments.

Vertebrates

Animals with a backbone or spinal column, including mammals, birds, reptiles, amphibians, and fish.

Invertebrates

Animals that lack a vertebral column, or backbone, including species such as insects, mollusks, and crustaceans.