(Advanced Analysis)Assume That the MPC Is

question 16

Multiple Choice

(Advanced analysis) Assume that the MPC is .8 in an economy that has an aggregate supply curve with a slope of 1.Also,suppose that the price level is flexible downward.A decrease in investment spending of $10 billion will shift the aggregate demand curve leftward by:

• A) $50 billion and decrease real GDP by $50 billion.
• B) $50 billion and decrease real GDP by $25 billion.
• C) $10 billion and decrease real GDP by $10 billion.
• D) $10 billion and decrease real GDP by $25 billion.

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Definitions:

Violations

Acts or omissions that breach laws, rules, or agreements.

Dissolution of a Partnership

The process of legally ending the relationship between partners and winding up the affairs of a partnership business.

Partnership Termination

The process or action of ending a business partnership, involving the settlement of assets and liabilities among partners.

Withdraw

To remove oneself or one's capital from an account, agreement, or situation.