If the MPC Is 0

question 58

Multiple Choice

If the MPC is 0.75, and the government cuts spending by $100 billion, the overall effect on GDP will be:

• A) a decrease of $400 billion.
• B) an increase of $250 billion.
• C) a decrease of $250 billion.
• D) an increase of $400 billion.

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Definitions:

Valuable

Describes something that holds great worth or importance, often due to its utility, rarity, or contribution towards achieving a goal.

Organized

Having a structured and systematic arrangement; often refers to entities or groups that are systematically coordinated, such as labor unions.

Efficient

The ability to achieve maximum productivity with minimum wasted effort or expense, often related to processes, systems, or machines.

Continuous Replacement

A strategy that involves regularly updating and replacing resources, assets, or personnel to maintain efficiency and competitiveness.