If No Fiscal Policy Changes Are Made, Suppose the Current

question 195

Multiple Choice

If no fiscal policy changes are made, suppose the current aggregate demand curve will increase horizontally by $1,000 billion and cause inflation. If the marginal propensity to consume (MPC) is 0.80, federal policymakers could follow Keynesian economics and restrain inflation by decreasing:

• A) government spending by $200 billion.
• B) taxes by $100 billion.
• C) taxes by $1,000 billion.
• D) government spending by $1,000 billion.

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Definitions:

Final Electron Acceptor

A molecule that accepts electrons at the end of an electron transport chain, facilitating the conservation of energy in the form of ATP.

Citric Acid Cycle

A series of chemical reactions used by all aerobic organisms to generate energy through the oxidation of acetate derived from carbohydrates, fats, and proteins.

Oxaloacetate

A four-carbon molecule involved in the Krebs cycle, crucial for energy production and metabolic processes in cells.

Cyclic Metabolic Pathway

A series of metabolic processes occurring in a cycle, whereby the end product of one reaction becomes the starting material for the next.