Assume the MPC Is 0

question 325

Multiple Choice

Assume the MPC is 0.625. Assuming only the multiplier effect matters, a decrease in government purchases of $10 billion will shift the aggregate demand curve to the

• A)left by about $13.3 billion.
• B)left by about $26.7 billion.
• C)right by about $36.7 billion.
• D)None of the above is correct.

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Definitions:

Western Front

A major theater of battle during World War I, stretching across Belgium and France, characterized by trench warfare and significant casualties.

French Officials

Personnel or authorities that govern, administer, or represent France at various levels of organization, from local communities to international relations.

United States Officials

Individuals holding positions of authority or public service in various branches of the U.S. government, including executive, legislative, and judicial roles.

Shell Shock

A term coined during World War I to describe the psychological trauma experienced by soldiers after prolonged exposure to warfare.