Suppose the Price Level Is fiXed, the MPC Is 0

question 61

Multiple Choice

Suppose the price level is fixed, the MPC is 0.5, and the GDP gap is a negative $100 billion. To achieve full-employment output (exactly) , government should

• A) increase government expenditures by $100 billion.
• B) increase government expenditures by $50 billion.
• C) reduce taxes by $50 billion.
• D) reduce taxes by $200 billion.

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Definitions:

Chimpanzees

A species of great ape that is native to Sub-Saharan Africa, known for their complex social structures and behaviors.

Natural Habitat

The original environment or ecosystem in which a particular species lives and evolves, providing necessary resources for its survival.

Primates

An order of mammals that includes humans, apes, monkeys, and prosimians, characterized by their large brains, forward-facing eyes, and opposable thumbs.

Behavioral Patterns

Repetitive actions or reactions exhibited by individuals often in response to certain stimuli or conditions, which can be common among specific groups or species.