If the MPC Equals 0

question 131

Multiple Choice

If the MPC equals 0.80,a $200 billion tax decrease will increase consumption in the first round by

• A)$40 billion.
• B)$160 billion.
• C)$200 billion.
• D)$100 billion.

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Definitions:

Inhibit

To restrain or hold back an action, reaction, or process.

Intensity

The degree of strength, force, or energy in a phenomenon such as light, sound, or an emotion.

External Sources

Pertains to information or influences that come from outside an individual or system, as opposed to internal or innate sources.

Self-initiated

Actions or activities that are begun or carried out by an individual independently, without external prompting or instruction.