Because of a Recession in Japan, Net Exports from the United

question 53

Multiple Choice

Because of a recession in Japan, net exports from the United States decrease by $10 billion.If the MPC is 0.75, how much less spending will occur in the U.S.economy in the second "round" of spending?

• A)$17.5 billion
• B)$10 billion
• C)$7.5 billion
• D)$5.0 billion

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Definitions:

MRP Curve

The Marginal Revenue Product curve, which shows the added revenue generated by increasing the employment of an additional unit of a resource, holding other factors constant.

Labor Demand Curve

Represents the relationship between the quantity of labor that employers are willing to hire and the wage rate, typically sloping downward from left to right.

Profit-Maximizing Firm

A business that adjusts its production and sale strategies to achieve the highest possible profit.

MRP = MRC

This equation stands for Marginal Revenue Product equals Marginal Resource Cost, a condition for profit maximization in firms, indicating the most efficient level of output where the cost of the last unit of input equals the revenue it generates.