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

question 116

Multiple Choice

In the short-run Keynesian model, if the mpc equals 0.8, then to increase aggregate spending by $20 billion at any output level, government spending must be increased by ______ or net taxes must be decreased by _____.

• A) $20 billion; $20 billion
• B) more than $20 billion; more than $20 billion
• C) less than $20 billion; less than $20 billion
• D) $20 billion; more than $20 billion

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Definitions:

Ingratiation

A psychological technique used to influence others through flattery or conformity to their opinions in order to make oneself more likable or acceptable.

Dependency Disorder

A psychological condition where an individual relies excessively on substances or behaviors to cope with daily life.

Violent Relationships

Relationships characterized by behaviors involving physical force intended to hurt, damage, or kill someone or something.

Self-Esteem

A measure of how much you value and respect yourself.