If MPC = 0

question 32

Multiple Choice

If MPC = 0.8, a $200 billion increase in government purchases would have what size effect on the "first round" of induced added consumption, and what total effect on AD?

• A)​increase "first round" consumption by $80 billion; increase AD by $400 billion
• B)​increase "first round" consumption by $160 billion; increase AD by $1 trillion
• C)​increase "first round" consumption by $200 billion; increase AD by $1 trillion
• D)​increase "first round" consumption by $800 billion; increase AD by $4 trillion

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Definitions:

Geometric Isomers

Molecules with the same molecular formula and sequence of bonded atoms (constitution), but differing in the three-dimensional orientations of their atoms in space.

(E)-2-pentene

An alkene with the formula CH3CH=CHCH2CH3 where the two substituents on the double bond are on opposite sides, denoted by the (E) configuration.

(Z)-2-pentene

An alkene with the chemical formula C5H10, where the double bond between carbons 2 and 3 has the highest priority substituents on the same side, following the Cahn-Ingold-Prelog priority rules.

Stereoisomers

Compounds sharing identical molecular formulas and sequences of bonded atoms, yet varying in the spatial arrangement of their atoms.