Suppose the MPC in the Economy in Figure 10

question 128

Multiple Choice

Suppose the MPC in the economy in Figure 10.2 equals 0.75 and the shift from AD₀ to AD₁ was caused by a decrease in investment of $50 billion.What will happen to the equilibrium level of real output as a result of the initial $50 billion decrease?

• A)It will fall by less than $200 billion.
• B)It will fall by exactly $200 billion.
• C)It will fall by more than $200 billion.
• D)It will fall by less than $67 billion.

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Definitions:

Talented Tenth

A term popularized by W.E.B. Du Bois referring to the supposed ten percent of African Americans who could lead the race to greater advancements through higher education and intellectual achievement.

Niagara Movement

An early 20th-century African-American civil rights group advocating for political, civil, and social rights, precursor to the NAACP.

Educated Blacks

Refers to African Americans who have attained formal education, particularly during times when access to education for Blacks was severely restricted.

Social Change

Social change involves the significant alteration of social structures and cultural patterns over time, affecting institutions, behaviors, and relationships.