If the MPC in an Economy Is 0

question 36

Multiple Choice

If the MPC in an economy is 0.75, government could shift the aggregate demand curve leftward by $60 billion by

• A) reducing government expenditures by $12 billion.
• B) reducing government expenditures by $60 billion.
• C) increasing taxes by $15 billion.
• D) increasing taxes by $20 billion.

---

Definitions:

Constructive

Relating to or characterized by building up, improving, or contributing positively to something.

Significant

Having a particularly important, notable, or consequential value or impact.

Persistent Annoyance

A continuous or recurring irritation that may affect one's performance, mood, or interactions negatively.

Self-serving Bias

A cognitive bias where individuals attribute their successes to internal factors and their failures to external factors.