Assume the Economy Is in Recession, the MPC Is 0

question 55

Multiple Choice

Assume the economy is in recession, the MPC is 0.80, and an increase of $200 billion in spending is needed in order to reach full employment. The target can be reached if government spending is increased by:

• A) $20 billion.
• B) $200 billion.
• C) $80 billion.
• D) $40 billion.

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Definitions:

Experience

The knowledge or skill acquired by a period of practical involvement in an activity.

Corticospinal Fibers

Neural pathways that transmit movement-related signals from the cerebral cortex to the spinal cord.

Synaptic Connections

The junctions through which neurons communicate with each other, transmitting signals via neurotransmitters.

Motor Neurons

Nerve cells that transmit impulses from the brain and spinal cord to muscles and glands, enabling movement and action.