Assume the MPC Is 0

question 103

Multiple Choice

Assume the MPC is 0.8.Assuming only the multiplier effect matters,a decrease in government purchases of $100 billion will shift the aggregate demand curve to the

• A)left by $180 billion.
• B)left by $500 billion.
• C)right by $180 billion.
• D)right by $400 billion.

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Definitions:

Physical Devices

Tangible pieces of hardware that are used for specific functions, often within technological or manufacturing settings.

Inventory Turnover

The relationship between the volume of goods sold and inventory, computed by dividing the cost of goods sold by the average inventory.

Purchase Order

An official document issued by a buyer committing to pay the seller for the supply of specific products or services at agreed prices.

Approved Vendor

A supplier that has been vetted and authorized by a company to provide goods or services.