If the MPC Is 0

question 73

Multiple Choice

If the MPC is 0.75,what is the value of the government purchases multiplier?

• A) -1.33
• B) 3.0
• C) -3.0
• D) 4.0
• E) -4.0

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Definitions:

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Binary Variable

A variable that has only two possible values, often represented as 0 and 1, used to denote presence or absence, success or failure, and similar dichotomies.

Optimal Solution

The most efficient, effective, or desirable solution to a problem or the best decision given the constraints.

Total Cash

The overall amount of liquid assets available to an individual or organization.