Assume the Marginal Propensity to Consume (MPC) Is 0

question 100

Multiple Choice

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

• A) left by $80 billion.
• B) right by $200 billion.
• C) right by $400 billion.
• D) left by $400 billion.

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Definitions:

Summarize

To condense a larger piece of content into its main points or essence.

Descriptive Statistics

Statistical procedures used to summarize, organize, and simplify data, including measures such as mean, median, mode, and standard deviation.

Generalize

The process of deriving general principles from specific instances, or making broad statements that apply across multiple cases.

Population

The total number of people living in a particular area or country.