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

question 73

Multiple Choice

In the short-run Keynesian model where the marginal propensity to consume is 0.75, to offset a recessionary gap resulting from a $1 billion decrease in autonomous consumption, taxes must be:

• A)increased by $1 billion.
• B)decreased by $1 billion.
• C)increased by $1.33 billion.
• D)decreased by $1.33 billion.

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Definitions:

Family Involvement

The active participation and engagement of family members in the educational and developmental processes of children.

Poverty

A condition where individuals lack sufficient financial resources to meet the minimum standards of living, affecting their access to basic needs such as food, shelter, and healthcare.

Longer-Lasting Stressors

Stress-producing factors or situations that persist over an extended period, often leading to significant impacts on physical or mental health.

Natural Disaster

Severe and unexpected events caused by natural forces, such as earthquakes, floods, hurricanes, or volcanic eruptions, that can lead to widespread damage and loss of life.