Assume the Marginal Propensity to Consume (MPC) Is 0

question 85

Multiple Choice

Assume the marginal propensity to consume (MPC) is 0.8 and the government cuts taxes by $250 billion. The aggregate demand curve will shift to the:

• A) right by $1000 billion.
• B) right by $750 billion.
• C) left by $1000 billion.
• D) left by $750 billion.

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Definitions:

Judicial Lien

A claim against a debtor's property that is granted by a court judgment, securing payment of a debt or settlement.

Assignment

The transfer of rights, property, or responsibilities from one party to another.

Trustee

A person or organization that holds and administers property or assets for the benefit of a third party under the terms of a trust agreement.

Creditors

Individuals or entities that are owed money or other assets by another entity, known as the debtor.