The MPC Is 0

question 116

Multiple Choice

The MPC is 0.90 and there are no income taxes or imports.If government expenditures on goods and services increase by $2.0 billion,after the multiplier effect works out,aggregate expenditure increases by

• A)$1.8 billion.
• B)$2.0 billion.
• C)$2.22 billion.
• D)$20 billion.
• E)$10 billion.

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Definitions:

Behave Differently

The alteration in an individual's actions or reactions in various situations or under different circumstances.

Understand

The ability to grasp the meaning, significance, or nature of something.

People

Human beings collectively, often referred to within the context of social, professional, or cultural groups.

Environmental Factors

External elements such as economic, political, social, and physical conditions that influence individuals or organizations.