In the Short-Run Keynesian Model Where the Marginal Propensity to Consume

question 63

Multiple Choice

In the short-run Keynesian model where the marginal propensity to consume is 0.5, to offset a recessionary gap resulting from a $1 billion decrease in autonomous consumption, government purchases must be:

• A) increased by $1 billion.
• B) decreased by $1 billion.
• C) increased by $0.5 billion.
• D) increased by $2 billion.

---

Definitions:

dBase File

A file format originally used by the dBase database management system to store data in a table structure.

Word Table

A feature in Microsoft Word that allows for the organization of data in rows and columns within a document.

Tab Order

The sequence in which the focus moves from one input field to another when the user presses the Tab key.

Button Order

The sequence or arrangement of buttons in a user interface, which can affect the usability and aesthetic of the interface.