If the MPC = 0

question 5

Multiple Choice

If the MPC = 0.6 and government purchases increase by $2 trillion,then equilibrium real GDP demanded

• A)increases by $5 trillion
• B)decreases by the government multiplier
• C)increases by $2 trillion
• D)decreases by $5 trillion
• E)is indeterminate

---

Definitions:

Perceptual Process

The sequence of steps that involves receiving, selecting, organizing, interpreting, and responding to sensory information.

Social Learning Theory

A theory that posits individuals learn behaviors, norms, and values by observing and imitating the actions of others.

Continuous Reinforcement

A method of learning that involves providing a reward or positive outcome every time a desired behavior is performed.

Categorical Thinking

involves organizing or classifying information and experiences into categories to simplify and speed up the decision-making process.