Suppose Government Purchases Increase by $100 Billion, That There Is

question 9

Multiple Choice

Suppose government purchases increase by $100 billion, that there is no crowding-out effect, and that the marginal propensity to consume is 0.9.What is the total effect of this increase in government purchases?

• A)$90 billion
• B)$111 billion
• C)$900 billion
• D)$1000 billion

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Definitions:

Greeting

A word or gesture used to acknowledge another person's presence or to welcome them.

Registering

The process of recording or enrolling information or individuals officially in a particular context.

Infectious Waste

Waste that can be dangerous to those who handle it or to the environment; includes human waste, human tissue, and body fluids as well as potentially hazardous waste, such as used needles, scalpels, and dressings, and cultures of human cells.

Body Fluids

Liquids originating from inside the bodies of living organisms, including blood, saliva, and urine.