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Assume the Marginal Propensity to Consume (MPC) Is 0

question 189

Multiple Choice

Assume the marginal propensity to consume (MPC) is 0.75 and the economy is in recession with real GDP $1 trillion below full-employment real GDP. To achieve full employment, aggregate demand (AD) must be increased $2 trillion. Following discretionary fiscal policy, government spending should be increased:


Definitions:

Employment Equity

A policy aimed at promoting fair treatment and eliminating discrimination in the workplace, ensuring equal opportunities for all employees.

Designated Group

Specific categories of individuals identified for special attention or treatment in policies or programs, often related to employment equity.

Employment Equity Plan

A strategic document outlining specific actions an organization will take to achieve employment equity and fair treatment for all employees.

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