Suppose That the MPC Is

question 216

Multiple Choice

Suppose that the MPC is .60 and there is no investment accelerator or crowding- out effects.If government expenditures increase $20 billion,aggregate demand

• A)shifts right $80 billion.
• B)shifts right $50 billion.
• C)shifts right $32 billion.
• D)None of the above is correct.

---

Definitions:

Indirect Materials

Materials used in the production process that are not directly included in the final product.

Indirect Labor

Refers to wages paid to employees who are not directly involved in the production of goods but support those who are.

Cost Elements

Cost Elements are the various types of expenses incurred in the production of goods or services, including materials, labor, and overhead.

Manufacturing

The process of producing goods from raw materials through the use of machinery and labor.