If the Economy Has an MPC of 0

question 81

Essay

If the economy has an MPC of 0.8, by how much will a $50 billion increase in government purchases increase GDP? By how much will a $50 billion increase in taxes decrease GDP?

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Definitions:

Splenius Capitus

A muscle located in the back of the neck, responsible for head rotation and extension.

Zygomaticus Major

The zygomaticus major is a facial muscle that extends from the zygomatic bone to the corners of the mouth, primarily involved in smiling.

Orbicularis Oculi

A circular muscle that surrounds the eye, responsible for closing the eyelids and contributing to facial expressions such as blinking and winking.

Occipitofrontalis

A muscle of the scalp that plays a role in facial expressions, such as raising the eyebrows.