In the Short-Run Keynesian Model, If the Mpc Equals 0

question 74

Multiple Choice

In the short-run Keynesian model, if the mpc equals 0.8, then to decrease planned aggregate spending by $30 billion at any output level, government spending must be decreased by ________ or net taxes must be increased by ________.

• A)$30 billion; $30 billion
• B)more than $30 billion; more than $30 billion
• C)less than $30 billion; less than $30 billion
• D)$30 billion; more than $30 billion

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Definitions:

Synapse

A junction between two nerve cells, consisting of a minute gap across which impulses pass by diffusion of a neurotransmitter.

Neurons

Specialized cells within the nervous system that transmit information to other nerve cells, muscle, or gland cells.

Junction

A point where two or more elements meet or connect, especially in the context of biological structures.

Synaptic Vesicles

Small sacs within presynaptic nerve terminals that contain neurotransmitters, critical for transmission of nerve impulses.