If Autonomous Spending Rises by $8 Billion and the MPC

question 64

Multiple Choice

If autonomous spending rises by $8 billion and the MPC = .75, what is the maximum potential impact on GDP after the full multiplier effect?

• A) It increases by $32 billion.
• B) It increases by $64 billion.
• C) It decreases by $16 billion.
• D) It decreases by $10.5 billion.

---

Definitions:

Enols

Organic compounds characterized by a carbon-carbon double bond directly adjacent to a hydroxyl group, serving as intermediates in various reactions.

Organic Product

A compound or substance that has been derived from a living organism and contains carbon atoms.

Iminium Salt

A compound derived from the addition of an amine to a carbonyl compound, forming a positively charged nitrogen atom.

Alkyl Halide

A compound containing a halogen atom covalently bonded to an alkyl group; also known as a haloalkane.