If the MPC Is 0

question 405

Multiple Choice

If the MPC is 0.75 and there are no crowding-out or accelerator effects, then an initial increase in aggregate demand of $100 billion will eventually shift the aggregate demand curve to the right by

• A)$80 billion.
• B)$125 billion.
• C)$400 billion.
• D)$500 billion.

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Definitions:

Credit Unions

Not-for-profit financial cooperatives that offer banking services, loans, and credit to members with common affiliations.

Central Bank

A national bank that provides financial and banking services for its country's government and commercial banking system, as well as implementing the government's monetary policy and issuing currency.

Point-Of-Sale

The location or system where a retail transaction is completed, such as cash registers or online checkout pages.

Debit Card

A payment card that deducts money directly from a consumer's checking account to pay for a purchase.