If Government Purchases Increase by $10 Billion When the MPC

question 39

True/False

If government purchases increase by $10 billion when the MPC is 0.8,then real GDP will increase by $50 billion.

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Definitions:

Weighted Contribution

A calculation that assigns different weights or importance to various items or activities based on their contribution to the total.

Crossover

In genetics, the exchange of genetic material between chromosomes during meiosis; in other fields, it refers to a point where two or more different categories or entities meet.

Fixed Costs

Expenses that do not change with the level of production or business activity, such as rent, salaries, and insurance premiums.

Variable Cost

Costs that vary directly with the level of production or sales volume, such as materials and labor.