If Policy Makers Want to Decrease Real GDP by $100

question 175

True/False

If policy makers want to decrease real GDP by $100 billion and the marginal propensity to consume is 0.6, they should increase taxes by more than $40 billion.

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Definitions:

Amplitude

In physics, amplitude refers to the maximum distance moved by a point or object from its equilibrium position in a periodic motion, such as in waves or vibrations.

Perceive

To become aware of, know, or identify by means of the senses.

Brightness

A perceptual attribute of light sources and colors that enables an observer to judge their intensity or illumination.

Colour Vision

The ability of the eye and brain to distinguish objects based on the wavelengths (or frequencies) of the light they reflect or emit.