Suppose the Price Level Is Fixed, the MPC Is 0

question 214

Multiple Choice

Suppose the price level is fixed, the MPC is 0.5, and the GDP gap is a negative $100 billion.To achieve full-employment output (exactly) , government should

• A)increase government expenditures by $100 billion.
• B)increase government expenditures by $50 billion.
• C)reduce taxes by $50 billion.
• D)reduce taxes by $200 billion.

---

Definitions:

Suicide

The deliberate act of taking one's own life.

Genetic Link

A term indicating a connection between genes and a particular trait or disorder.

Bipolar Disorder

A psychological disorder marked by significant fluctuations in mood, ranging from high periods of mania or hypomania to low phases of depression.

Phobic Disorders

Phobic disorders are characterized by persistent and irrational fears of specific objects, activities, or situations leading to avoidance behavior and distress.