If the Marginal Propensity to Consume Is 0

question 7

Multiple Choice

If the marginal propensity to consume is 0.8 and the proportional income tax rate is 0.25, by how much would the equilibrium level of real GDP demanded increase if government purchases rose by $50 billion?

• A)$50 billion
• B)$100 billion
• C)$500 billion
• D)$125 billion
• E)$275 billion

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Definitions:

Menopause

Physiological cessation of ovulation and menstruation that typically occurs during middle adulthood in women.

Climacteric

Physiological, developmental change that occurs in the male reproductive system between the ages of 45 and 60.

Irregular Menstrual

Refers to variations in the menstrual cycle that deviate from the typical 28-day cycle, affecting frequency, duration, and flow.

Emerging Adulthood

The time from adolescence to the young adult when responsibilities of a stable job, marriage, and parenthood begin. It includes five features: the age of identity exploration; the age of instability, the age of self-focus, the age of feeling in between and the age of possibilities.