Assume That the MPC Is 0

question 40

Multiple Choice

Assume that the MPC is 0.75.Assume that there is a multiplier effect and that the total crowding-out effect is $6 billion.An increase in government purchases of $10 billion will shift aggregate demand

• A)left by $24 billion.
• B)left by $36 billion.
• C)right by $34 billion.
• D)right by $36 billion.

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Definitions:

Resale Value

The amount of money that an asset will be sold for at some point in the future.

F Test

A statistical test used to compare the variances of two populations or to test the equality of two or more means in the context of variance.

Predictor Variables

Independent variables in statistical models that are used to predict outcomes of dependent variables.

Resale Value

The expected amount of money that an asset or property will sell for at a future point in time, considering depreciation and market conditions.