If Government Increases Its Purchases by $20 Billion and the MPC

question 51

Multiple Choice

If government increases its purchases by $20 billion and the MPC = 0.9, the resulting increase in the consumption component of AD is:

• A)​$2 billion.
• B)​$18 billion.
• C)​$180 billion.
• D)​$200 billion.

---

Definitions:

Parkinsonism

A syndrome characterized by symptoms such as tremors, stiffness, and slow movement, similar to those seen in Parkinson's disease.

Stooped Posture

A forward bending of the spine, often associated with conditions such as osteoporosis, Parkinson's disease, or long-term spinal muscle weakness.

Pill-Rolling

A type of tremor characteristic of Parkinson's disease, resembling the motion of rolling a small object or pill between the thumb and forefinger.

Increased Intracranial Pressure

Elevated pressure within the skull, which can lead to neurological issues and requires immediate medical attention.