Suppose the MPC Is 0

question 94

Multiple Choice

Suppose the MPC is 0.85.If government purchases increase by $10 billion and net taxes fall by $10 billion,equilibrium output will

• A) fall by $10 billion
• B) increase by $10 billion
• C) increase by $20 billion
• D) increase by $66.7 billion
• E) increase by $123.3 billion

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Definitions:

Personality

A set of emotional, cognitive, and behavioral patterns that distinguish an individual.

Psychoanalysis

A therapeutic approach and theory of personality developed by Sigmund Freud, focusing on unconscious motivations and early childhood experiences.

Sigmund Freud

An Austrian neurologist and founder of psychoanalysis, a clinical method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Psychological Disorders

Mental disorders characterized by patterns of behavior or psychological symptoms that impact multiple areas of life.