Assume the MPC Is 0

question 126

Multiple Choice

Assume the MPC is 0.80. Assume there is a multiplier effect and that the total crowding-out effect is $7 billion. An increase in government purchases of $40 billion will shift aggregate demand to the

• A)left by $165 billion.
• B)left by $193 billion.
• C)right by $193 billion.
• D)right by $165 billion.

---

Definitions:

ATP Synthase

An enzyme located in the membrane of mitochondria that helps in the synthesis of ATP (adenosine triphosphate) from ADP and phosphate during cellular respiration.

Hydrogen Ions

Positively charged ions of hydrogen, crucial in determining the acidity or alkalinity of solutions.

Diagram

A simplified drawing showing the appearance, structure, or workings of something, typically used for explanation purposes.

Space

The vast, seemingly infinite expanse that exists beyond Earth's atmosphere, consisting of other celestial bodies, stars, and galaxies.