Suppose the MPC Is 0

question 39

Multiple Choice

Suppose the MPC is 0.9.There are no crowding out or investment accelerator effects.If the government increases its expenditures by $30 billion,then by how much does aggregate demand shift to the right? If the government decreases taxes by $30 billion,then by how far does aggregate demand shift to the right?

• A)$283 billion and $254.7 billion
• B)$283 billion and $283 billion
• C)$300 billion and $270 billion
• D)$300 billion and $300 billion

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Definitions:

Book Value Per Share

Book Value Per Share is a financial metric that measures a company's net asset value on a per-share basis, calculated by dividing total assets minus liabilities by the number of shares outstanding.

Cash Inflows

Money received by a business from its operational, investing, and financing activities.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets.