Assume That the MPC Is

question 78

Multiple Choice

Assume that the MPC is .9 and investment falls by $30 billion.What is the change in real GDP?

• A)−$300 billion 
• B)−$270 billion 
• C)−$93 billion 
• D)−$39 billion

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Definitions:

Extrinsic Rewards

Incentives provided by external sources, such as money, promotions, or recognition, that motivate individuals to perform certain behaviors or achieve goals.

Lower-Order Needs

refer to basic human requirements such as safety, physiological needs, and security, primarily described in Maslow's hierarchy of needs.

Maslow's Hierarchy

A psychological theory proposing that humans are motivated by five basic categories of needs: physiological, safety, love/belonging, esteem, and self-actualization, in that order.

Lower-Order Needs

Basic human requirements such as physiological and safety needs that must be satisfied before higher-order needs can be addressed.