Given an MPC of 0

question 26

Multiple Choice

Given an MPC of 0.80, if there are no income taxes or imports and prices are constant, then when investment increases by $50 million and prices are fixed, equilibrium GDP would

• A) increase by $50 million.
• B) increase by $250 million.
• C) increase by $400 million.
• D) To answer the question more information on income is needed.

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Definitions:

Equitable Liens

A legal right or interest in a debtor's property, granted by a court to a creditor as a form of security for a debt or obligation.

Sales Contract

A legally binding agreement between a seller and a buyer detailing the sale of goods or services.

Court

A governmental institution authorized to settle disputes, adjudicate legal matters, and administer justice in accordance with the law.

Statute of Frauds

A legal principle that requires certain types of contracts to be in writing and signed by the parties involved in order to be enforceable.