Assuming That MPC Is 0

question 170

Multiple Choice

Assuming that MPC is 0.75, equal increases in government spending and tax collections by $10 billion will

• A)leave the equilibrium GDP unchanged.
• B)increase the equilibrium GDP by $10 billion.
• C)increase the equilibrium GDP by $2.5 billion.
• D)reduce the equilibrium GDP by $10 billion.

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Definitions:

Limbic System

A complex system of nerves and networks in the brain, involving several areas near the edge of the cortex concerned with instinct and mood. It controls basic emotions and drives.

Emotion And Memory

The interrelation between how emotions significantly influence the recall and retention of memories.

Brain Mechanisms

The underlying physical, chemical, and biological processes within the brain that enable thought, perception, emotion, and behavior.

"Rewired" Neural Connections

Changes in the brain's neural pathways and synapses that occur due to learning, experience, and memory formation.