If the MPC Is 0

question 13

Multiple Choice

If the MPC is 0.9, and the government cuts spending by $200 billion, the overall effect on GDP will be:

• A) a decrease of $2,000 billion.
• B) an increase of $2,000 billion.
• C) a decrease of $1,800 billion.
• D) an increase of $180 billion.

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Definitions:

Polyunsaturated

Referring to fat molecules having more than one unsaturated carbon bond in the molecule, found in various oils and fatty acids.

Linseed Oil

An oil obtained from the dried seeds of the flax plant, used as a drying oil in paints and varnishes, as well as in wood finishes.

Corn Oil

A vegetable oil extracted from the germ of corn, primarily used for cooking and as an ingredient in food products, containing a high percentage of unsaturated fats.

Olive Oil

A liquid fat obtained from olives, a traditional tree crop of the Mediterranean Basin, used in cooking, cosmetics, pharmaceuticals, and soaps, and as a fuel for traditional oil lamps.