If the MPC Is 0

question 1

Multiple Choice

If the MPC is 0.8 and there are no crowding-out or accelerator effects,then an initial increase in aggregate demand of $120 billion will eventually shift the aggregate demand curve to the right by

• A)$216 billion.
• B)$150 billion.
• C)$600 billion.
• D)$480 billion.

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Definitions:

Entire Cost

This term is not clearly defined in general accounting or financial terminology; hence, it could be mistaken or too vague without further context. NO.

Income Taxes

Taxes imposed by the government on the income generated by businesses and individuals within their jurisdiction.

Capital Budgeting

A process businesses use to evaluate and select major investment projects, considering their potential for future profits.

Income Tax Expense

The cost incurred by businesses and individuals related to the taxes on their income, reflecting the amount of income tax that a company is obligated to pay to tax authorities.