If the MPC Is 0

question 109

Multiple Choice

If the MPC is 0.8,what decrease in government purchases would be called for to achieve a $50 billion decrease in AD?

• A)$10 billion
• B)$40 billion
• C)$50 billion
• D)$62.5 billion

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Definitions:

FOB Shipping Point

A term indicating that the buyer assumes responsibility and ownership of goods the moment they are shipped from the seller's location.

Credit Memo

A document issued to a buyer, reducing the amount they owe due to a return or rebate.

Chart of Accounts

A systematic list of all accounts used by an organization, essential for organizing financial information and preparing financial statements.

Merchandising Business

A commercial enterprise that purchases goods in a finished condition for the purpose of resale without further manufacturing.