If the MPC Is 0

question 111

Multiple Choice

If the MPC is 0.75 and there are no crowding-out or accelerator effects, an initial increase in AD of $100 billion will eventually shift the AD curve to the right by how much?

• A) $40 billion
• B) $133.33 billion
• C) $250 billion
• D) $400 billion

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Definitions:

Environmental Quality

The state of the physical, chemical, and biological conditions of the environment based on various indicators.

Oligopolistic Agreements

Arrangements among competitors in an oligopoly to set prices, limit production, or divide markets, often to maximize collective profits.

Monopoly Price

The price set by a monopolist, typically higher than in competitive markets, due to the absence of competition in supplying a good or service.

Collusive Agreements

Secret or illegal cooperation or conspiracy, especially between businesses, in order to deceive or gain an unfair advantage.