If Government Increases Its Purchases by $15 Billion and the MPC

question 193

Multiple Choice

If government increases its purchases by $15 billion and the MPC is 2/3, then we would expect the equilibrium GDP to

• A)increase by $30 billion.
• B)increase by $45 billion.
• C)decrease by $35 billion.
• D)increase by $50 billion.

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Definitions:

Retail Pricing Strategy

Approaches and tactics a retailer uses to set the prices of its products or services to maximize profitability.

Inventory

The total amount of goods and materials held in stock by a business, warehouse, or store.

Wedding Dresses

Specialized attire worn by brides during wedding ceremonies, varying widely in style, color, and design according to cultural and personal preferences.

Markdowns

Reductions from the original selling price of goods, often used to clear inventory or stimulate sales.