Econia's Real GDP Is $700 Billion

question 51

Multiple Choice

Econia's real GDP is $700 billion. Full-employment real GDP is $900 billion. The MPC = .75. If the full multiplier effect occurs, which of the following policies would move the economy to a full-employment equilibrium?

• A) Decrease government purchases by $150 billion.
• B) Decrease taxes by $150 billion.
• C) Increase government purchases by $50 billion.
• D) Increase taxes by $50 billion.

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Definitions:

Deep Brain Stimulation

A neurosurgical procedure where electrodes are implanted in the brain to send electrical impulses to specific areas for therapeutic purposes.

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A long-term degenerative disorder of the central nervous system that mainly affects the motor system, leading to tremors and difficulty with movement and coordination.

Electrode

A conductor through which an electric current enters or leaves an object, substance, or region.

Magnetic Coil

A magnetic coil is a coil of wire that creates a magnetic field when an electric current flows through it, widely used in electronics and electrical engineering.