Assume That the MPC Is 0

question 43

Multiple Choice

Assume that the MPC is 0.85 and investment spending rises by $100 million.How much consumption spending will this generate in the second round of spending?

• A)$15 million
• B)$85 million
• C)$100 million
• D)$118 million
• E)$185 million

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Definitions:

Enslaved People

Individuals who are forcibly held in servitude and owned by others, often with their legal rights entirely stripped away, indicating a focus on the human aspect and experiences of those subjected to slavery.

Freed Slaves

Individuals who were once enslaved but gained freedom, either through legal means such as emancipation or by escaping from their enslavers.

Southern Economy

Refers to the economic structure and characteristics dominant in the Southern United States, historically characterized by agriculture and plantation systems.

Plantations

Large agricultural estates typically found in tropical or subtropical regions that specialize in the mass production of a single cash crop, such as sugar, cotton, or tobacco.