Suppose That the MPC Is 0

question 21

Multiple Choice

Suppose that the MPC is 0.7,there is no investment accelerator,and there are no crowding-out effects.If government expenditures increase by $30 billion,then aggregate demand

• A)shifts rightward by $100 billion.
• B)shifts rightward by $51 billion.
• C)shifts rightward by $170 billion.
• D)shifts rightward by $72.8 billion.

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Definitions:

Deviation

In statistics, it refers to how far a particular data point is from the mean of the data set.

Negatively Skewed

A distribution with a tail that extends to the left, indicating that the majority of the data points are located towards the right of the mode.

Distribution

In statistics, the way in which data or values are spread or distributed across possible values or intervals.

Normal Distribution

A symmetric, bell-shaped distribution of data where most of the observations cluster around the central peak and the probabilities for values further away from the mean taper off equally in both directions.