In an Economy with an MPW of 0

question 22

Multiple Choice

In an economy with an MPW of 0.67,taxes are decreased,causing an initial $10 billion change in the consumption of domestic items.As a result,aggregate demand eventually shifts:

• A)rightward by $10 billion
• B)leftward by $10 billion
• C)rightward by $30 billion
• D)leftward by $15 billion
• E)rightward by $15 billion

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Definitions:

Substitute Product

A product that can be used in place of another product, satisfying the same consumer needs or wants.

LRMC

Long-Run Marginal Cost, which refers to the additional cost of producing one more unit of a good or service when all inputs are variable in the long term.

Increase Traffic

Refers to the actions and strategies deployed to attract more visitors or users to a website, online platform, or physical location.

Parking Rates

The fees charged for the use of parking spaces, often varying based on location, time, and demand.