Assume That the MPC Is 0

question 75

Multiple Choice

Assume that the MPC is 0.75.Assuming that only the multiplier effect matters,a decrease in government purchases of $10 billion will shift the aggregate demand curve

• A)left by $13.5 billion.
• B)left by $40 billion.
• C)right by $75 billion.
• D)None of the above is correct.

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Definitions:

Principal Owners

Individuals or entities that hold a primary share of ownership in a business, often having significant influence on company decisions.

New Businesses

Entities that have been recently established or founded, entering the marketplace with fresh offerings or services.

Survive

The ability to continue to live or exist, especially in spite of difficult conditions or circumstances.

Five-Year Mark

A significant milestone that denotes a period of five years, often used to evaluate the progress or success of a project, initiative, or business.