In the Short-Run Keynesian Model, If the Mpc Equals 0

question 143

Multiple Choice

In the short-run Keynesian model, if the mpc equals 0.8, then to increase planned aggregate spending by $20 billion at any output level, government spending must be increased by ________ or net taxes must be decreased by ________.

• A)$20 billion; $20 billion
• B)more than $20 billion; more than $20 billion
• C)less than $20 billion; less than $20 billion
• D)$20 billion; more than $20 billion

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Definitions:

World Population

The total number of human inhabitants of the planet Earth at a given time, estimated by demographers.

Human Resources

The personnel of a business or organization, especially when regarded as a significant asset.

Developing Nations

Countries with a lower level of industrialization, lower per capita income levels, and often higher rates of poverty compared to developed countries.

Unemployment

The situation when individuals who are willing and able to work are unable to find employment, often measured by the unemployment rate.