If the Marginal Propensity to Consume (MPC) Is 0

question 13

Multiple Choice

If the marginal propensity to consume (MPC) is 0.8 and the parliament votes for a $100 million tax cut. What is the change in aggregate demand?

• A) $250 million.
• B) $200 million.
• C) $100 million.
• D) $80 million.

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Definitions:

Mood

A temporary state of mind or feeling that influences an individual's outlook and behavior.

Facial Feedback Hypothesis

The idea that changes in facial expression elicit emotions associated with those expressions.

James-Lange Theory

A theory of emotion that suggests emotions occur as a result of physiological reactions to events.

Facial Expression

The use of facial muscles to convey emotions or reactions non-verbally.