Assume an Economy with an Upward-Sloping Aggregate Supply Curve and an MPC

question 182

Multiple Choice

Assume an economy with an upward-sloping aggregate supply curve and an MPC of .80.An increase in investment spending of $50 billion will most likely increase total income by

• A)$200 billion.
• B)$40 billion.
• C)more than $200 billion.
• D)more than $50 billion but less than $250 billion.

---

Definitions:

Basilar Membrane

A key structure in the cochlea of the inner ear, it vibrates in response to sound, playing a critical role in the mechanical to neural transduction of sound.

Cochlea

A spiral-shaped cavity of the inner ear that plays a key role in converting sound waves into electrical signals for the brain to interpret as sound.

Ossicle

Small bones in the middle ear that transmit sound vibrations from the eardrum to the inner ear.

Perceptual Constancy

The ability of the perceptual system to recognize objects as having consistent shape, size, and color despite changes in perspective, distance, or lighting.