Suppose That the MPC Is 0

question 7

Multiple Choice

Suppose that the MPC is 0.5 and there is no investment accelerator or crowding-out effects. If government expenditures increase by $200 billion, what happens to aggregate demand?

• A) It shifts right by $200 billion.
• B) It shifts left by $200 billion.
• C) It shifts right by $400 billion.
• D) It shifts left by $400 billion.

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Obese People

Individuals who have an excessive amount of body fat, often defined by a body mass index (BMI) of 30 or higher.

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A proposed explanation for a phenomenon, made as a starting point for further investigation.

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