Assume the Marginal Propensity to Consume (MPC)is 0

question 24

Multiple Choice

Assume the marginal propensity to consume (MPC) is 0.80 and the government cuts taxes by $100 billion. The aggregate demand curve will shift to the:

• A)right by $80 billion.
• B)left by $200 billion.
• C)right by $400 billion.
• D)left by $400 billion.
• E)None of these.

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Definitions:

FireWire

A high-speed serial bus interface standard for connecting digital devices, especially audio and video equipment, to a computer, allowing for rapid data transfer.

IEEE 1394

An interface standard for a serial bus for high-speed communications and isochronous real-time data transfer, commonly referred to as FireWire.

RJ-45

A type of connector used on Ethernet network cards and ports. Used to connect a device to the wired network.

RJ-11

A type of connector used with analog modems and traditional phone jacks.