If the MPC = 4/5, Then the Government Purchases Multiplier

question 118

Multiple Choice

If the MPC = 4/5, then the government purchases multiplier is

• A)5/4.
• B)4/5.
• C)5.
• D)20.

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Definitions:

Efficient Market

A market in which prices fully reflect all available information, making it impossible to consistently achieve higher-than-average returns.

Profit Opportunities

Situations or strategies through which a business can increase its profits, often by improving efficiency, entering new markets, or innovating products and services.

Macroeconomic Analysis

The study and evaluation of the economy as a whole, including factors like inflation, unemployment, and economic growth.

Macroeconomy

The sector of economics study that deals with the performance, structure, and behavior of an economy as a whole, focusing on economy-wide phenomena.