Assume the MPC Is 0

question 221

Multiple Choice

Assume the MPC is 0.75. Assuming only the multiplier effect matters, a decrease in government purchases of $100 billion will shift the aggregate demand curve to the

• A)left by $200 billion.
• B)left by $400 billion.
• C)right by $800 billion.
• D)None of the above is correct.

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Definitions:

Powdered Material

Fine, dry particles produced by the grinding, crushing, or disintegration of a solid substance.

Density

A physical property of matter defined as the mass per unit volume.

Mass

A measure of the amount of matter contained in an object, commonly measured in kilograms or grams.

Liquid Sample

A portion of matter in the liquid state used for analysis or testing.