If the MPC Is 0

question 125

Multiple Choice

If the MPC is 0.9, and the government cuts spending by $200b, the overall effect on GDP will be:

• A) a decrease of $2,000b.
• B) an increase of $2,000b.
• C) a decrease of $1,800b.
• D) an increase of $180b.

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Definitions:

Positive Disposition

A tendency to maintain a positive outlook and approach situations with a constructive attitude.

Critical Thinking

The method of impartially examining and assessing a matter to reach a decision.

Skilled and Eager

Describes someone who possesses the necessary abilities or proficiency and shows a keen enthusiasm or readiness to undertake tasks.

Eagerness

A keen desire or enthusiasm to do something or for something to happen.