Starting at $30 Billion Less Than Full Employment,if MPC Is

question 81

Multiple Choice

Starting at $30 billion less than full employment,if MPC is 2/3,what impact would a decrease in government purchases of $10 billion have on AD?

• A)It would increase AD by $15 billion.
• B)It would decrease AD by $30 billion.
• C)It would decrease AD by $15 billion.
• D)It would increase AD by $30 billion.

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Definitions:

Attention

the act or state of applying the mind to something; the ability to closely and carefully listen, watch, or consider something or someone.

Automatic Processing

The performance of a task with little or no conscious thought, often as a result of repeated practice and learning.

Controlled Processing

A detailed level of mental processing that requires focused attention and effort, typically used when a task is difficult or unfamiliar.

Task Difficulty

Refers to the level of challenge presented by a task, assessing how hard or easy it is to complete.