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Suppose That the MPC Is 0

question 75

Multiple Choice

Suppose that the MPC is 0.50 and there is no investment accelerator or crowding-out effects. If government expenditures increase by $20 billion, what happens to aggregate demand?


Definitions:

Psychosurgery

Surgery that removes or destroys brain tissue in an effort to change behavior.

Chemical Abnormalities

Refers to the alterations in the body's chemical levels, often impacting mood, behavior, and cognitive functions, potentially leading to various mental health disorders.

Drug Therapies

The treatment of disease or symptoms with pharmaceutical drugs.

Double-blind Technique

A research method in which both the subjects and the experimenters are unaware of who is receiving the treatment, to eliminate bias.

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