Suppose That the MPC Is 0

question 69

Multiple Choice

Suppose that the MPC is 0.5 and there is no investment accelerator or crowding-out effects.If government expenditures increase by $20 billion,what happens to aggregate demand?

• A)It shifts right by $20 billion.
• B)It shifts left by $20 billion.
• C)It shifts right by $40 billion.
• D)It shifts left by $40 billion.

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Definitions:

MRNA

Messenger RNA, a type of RNA that carries genetic information from DNA to the ribosome, where proteins are synthesized.

Surface Area

The total area of the external layer or surface of an object or body, often relevant in processes such as absorption and evaporation.

Volume Ratio

A comparative measure of the volume of one substance or entity to another, often used in scientific experiments and calculations.

Prokaryotic Cells

Cells that lack a distinct nucleus and membrane-bound organelles, characteristic of bacteria and archaea.