Assume the Marginal Propensity to Consume (MPC) Is 0

question 132

Multiple Choice

Assume the marginal propensity to consume (MPC) is 0.75 and the government increases taxes by $250 billion. The aggregate demand curve will shift to the:

• A) left by $1,000 billion.
• B) right by $1,000 billion.
• C) left by $750 billion.
• D) right by $750 billion.

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Definitions:

Contractual Relationship

A legal connection between two or more parties that is established by a contract, outlining the rights and obligations of each party.

Good Faith

The sincere intention to be fair, open, and honest, regardless of the outcome of the interaction.

Enforceable Contract

A legally binding agreement between parties that can be enforced by law if not fulfilled as agreed.

Misrepresentation

The act of providing false or misleading information, often with the intent to deceive others during agreements or transactions.