Suppose the MPC Is 0

question 182

Multiple Choice

Suppose the MPC is 0.9.If autonomous consumption spending increases by $20 billion,equilibrium output will

• A) increase by $22.2 billion
• B) increase by $200 billion
• C) not change because the MPC only changes consumption when income changes
• D) not change because the expenditures multiplier only applies to changes in investment spending and government purchases
• E) increase by $18 billion.

---

Definitions:

Systematic Desensitization

A behavioral therapy technique used to reduce phobic responses or anxiety through gradual exposure to the feared object or situation coupled with relaxation exercises.

Counterconditioning

A behavioral therapy technique that involves teaching the patient to associate a positive response with a stimulus that previously elicited a negative response.

CS

Stands for "Conditioned Stimulus," which is a previously neutral stimulus that, after becoming associated with the unconditioned stimulus, eventually comes to trigger a conditioned response.

Intero-Exteroceptive Conditioning

a form of conditioning that involves the learning process of associating internal physiological states with external stimuli.