Suppose the Federal Government Buys $20 Million Worth of Computers

question 17

Multiple Choice

Suppose the federal government buys $20 million worth of computers.If the MPC is 0.60,what will be the impact on aggregate demand,other things being equal?

• A)Aggregate demand will increase $12 million.
• B)Aggregate demand will increase $13.33 million.
• C)Aggregate demand will increase $20 million.
• D)Aggregate demand will increase $50 million.

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Definitions:

Statement of Stockholders' Equity

A financial document that shows changes in the equity section of a company's balance sheet, including stock transactions and retained earnings.

Fiscal Year

A one-year period used for financial reporting and budgeting purposes, which doesn't necessarily align with the calendar year.

Condensed Income Statement

A simplified financial statement that shows a company's revenues, expenses, and net income over a specific period, omitting detailed line items.

Operating Expenses

Costs associated with the day-to-day functions of a business outside of direct production costs, including items like rent, utilities, and payroll expenses.