Assuming That MPC Is

question 107

Multiple Choice

Assuming that MPC is .75, equal increases in government spending and tax collections by $10 billion will:

• A) Leave the equilibrium GDP unchanged
• B) Increase the equilibrium GDP by $10 billion
• C) Increase the equilibrium GDP by $2.5 billion
• D) Reduce the equilibrium GDP by $10 billion

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Definitions:

Involuntary Bankruptcy

A legal process initiated by creditors against a debtor who is unable to pay its debts, forcing the debtor into bankruptcy proceedings.

Chapter 7

A bankruptcy provision that involves the liquidation of a debtor's non-exempt assets to pay off creditors.

Alimony Payments

are financial support payments made by one ex-spouse to the other after divorce, as mandated by the court.

Consumer Debt

Financial obligations incurred by individuals primarily for personal, family, or household purposes, including credits cards, mortgages, and personal loans.