If Government Spending Increased by $50 Billion and the MPC

question 29

Multiple Choice

If government spending increased by $50 billion and the MPC within the economy was 0.8, what would be the total impact on real GDP?

• A)$62.5 billion decrease
• B)​$62.5 billion increase
• C)​$250 billion decrease
• D)​$250 billion increase

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Definitions:

Collagen

A protein that provides structure, strength, and elasticity to connective tissues like skin, ligaments, and tendons.

Connective Tissue

Tissue that supports, binds together, and protects tissues and organs of the body.

Matrix

A substance or environment in which something develops; in biology, it often refers to the intercellular substance of a tissue.

Connective Tissue

Tissue that supports, connects, or separates different types of tissues and organs in the body, including blood, bone, and fat tissues.