Suppose That Marginal Propensity to Consume Is Equal to 0

question 181

Multiple Choice

Suppose that marginal propensity to consume is equal to 0.9 and the government increases its spending by $200 billion. This increase in spending is financed by a $200 billion increase in taxes. As a result of this, GDP will:

• A)not change at all.
• B)decrease by $200 billion.
• C)increase by $2,000 billion.
• D)increase by $200 billion.

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Definitions:

Adaptive Evolution

The method by which populations adapt to their surroundings by evolving genetic characteristics across generations.

Environmental Change

Any alteration in the conditions of an environment, due to natural processes or human activities, that can affect the organisms living within it.

Hardy-Weinberg Equilibrium

A rule that indicates the frequencies of alleles and genotypes in a population will stay unchanged over generations if there are no other factors driving evolution.

Allele Frequencies

The relative frequency of different variants (alleles) of a particular gene in a population, which can change over time due to various evolutionary pressures.