If the MPC in an Economy Is 0

question 181

Multiple Choice

If the MPC in an economy is 0.8, government could shift the aggregate demand curve rightward by $100 billion by

• A) increasing government spending by $25 billion.
• B) increasing government spending by $80 billion.
• C) decreasing taxes by $25 billion.
• D) decreasing taxes by $100 billion.

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Definitions:

Sole Proprietorship

A sole proprietorship is a form of business owned and run by one individual, where there is no legal distinction between the owner and the business.

Unlimited Liability

A legal structure in which owners are personally responsible for all of the company's debts and liabilities without limit.

Limited Liability

A legal structure where a company's owners are protected from personal liability for the company's debts or liabilities.

Limited Liability

Refers to a legal structure where a company's owners are not personally liable for the company's debts or liabilities.