If the MPC Is

question 354

Multiple Choice

If the MPC is .6,and investment spending falls by $50 billion,GDP will fall by $____ billion.

• A)20.
• B)30.
• C)50.
• D)100.
• E)125.

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Definitions:

Income Effect

The relationship between income fluctuations in an individual’s or economic environment’s finances and its influence on the quantity of goods or services demanded.

U.S. GDP

The total market value of all final goods and services produced within the United States during a specific time period.

Farm Outputs

The total variety and quantity of goods produced by farming activities, including crops, livestock, and other agricultural products.

Dairy Margin Protection Program

A federal program in the United States designed to protect dairy producers when the margin between milk prices and feed costs falls below a certain level.