If the MPC Is 0

question 113

Multiple Choice

If the MPC is 0.6, and the government increases spending by $300 billion, the overall effect on GDP will be:

• A) a decrease of $750 billion.
• B) an increase of $750 billion.
• C) a decrease of $550 billion.
• D) an increase of $250 billion.

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Definitions:

Nonrenewable Fossil Fuel Energy

Energy sources like coal, oil, and natural gas that cannot be replenished in a short period and are extracted from the earth's crust.

Agriculture

The science and practice of cultivating plants and livestock, a fundamental sector that supplies the world with food, raw materials, and employment.

Solar Energy

Energy from the sun that is converted into thermal or electrical energy.

Human Labour

The work performed by humans that contributes to the production of goods and services in an economy.