If the MPC Is 0

question 43

Multiple Choice

If the MPC is 0.6 and if the goal is to increase real GDP by $200 million, then by how much would government spending have to change to generate this increase in real GDP?

• A) $240 million.
• B) $200 million.
• C) $180 million.
• D) $80 million.

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Definitions:

Shortage

A situation in which the demand for a product or service exceeds the supply available at a specific price.

Tax on Good

A financial charge imposed by a government on the sale of a product or service, affecting its price.

Demand Curve

A graph showing the relationship between the price of a good or service and the quantity demanded for it at those prices.

Good Sold

Refers to merchandise or items that have been purchased or exchanged in a transaction.