If Policy Makers Want to Decrease Real GDP by $100

question 302

True/False

If policy makers want to decrease real GDP by $100 billion and the marginal propensity to consume is 0.6, they should decrease government purchases of goods and services by $40 billion.

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Definitions:

Knowledge Exploitation

The process of utilizing existing knowledge within an organization to create value or competitive advantage.

Perception

The process of interpreting the messages of our senses to provide order and meaning to the environment.

Threat

A threat is any circumstance or event with the potential to cause harm to a system, individual, organization, or country.

Inertia

The resistance to change or the tendency for objects or systems to remain in their current state without external force acting upon them.