If the MPC Is

question 27

True/False

If the MPC is .8 in a private closed economy,a $30 billion increase in planned investment will increase equilibrium real GDP by $120 billion.

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Definitions:

Indirect Price Discrimination

A pricing strategy where different prices are charged for the same product or service in different markets or segments, not directly by customer characteristics.

Decreasing Returns

Refers to a situation in which adding more of a production factor, such as labor or capital, results in progressively smaller increases in output.

Direct Price Discrimination

A pricing strategy where a seller adjusts prices for different customers based on observable personal characteristics or willingness to pay.

Elastic Demand

A situation where the demand for a good or service greatly changes in response to changes in price.