If the MPC Is 2/3 Then the Multiplier Is

question 379

Multiple Choice

If the MPC is 2/3 then the multiplier is

• A)3/2, so a $100 increase in government spending increases aggregate demand by $150.
• B)3/2, so a $100 increase in government spending increases aggregate supply by $150.
• C)3, so a $100 increase in government spending increases aggregate demand by $300.
• D)3, so a $100 increase in government spending increases aggregate supply by $300.

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Definitions:

Cause-and-Effect Diagram

A visual tool used to systematically identify, organize, and display potential causes of a problem or effect.

Quality Loss Function

A mathematical formula introduced by Genichi Taguchi, representing the loss of value from failing to achieve optimal product quality.