If the MPC Is 0

question 25

Multiple Choice

If the MPC is 0.80, all taxes are lump-sum taxes, and the equilibrium GDP is $25 billion below the full-employment GDP, then the size of the recessionary expenditure gap is:

• A) $2 billion
• B) $4 billion
• C) $5 billion
• D) $6 billion

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Definitions:

Divisional Organizations

Companies structured into semi-autonomous units called divisions, each with its own resources and objectives, aligned under the larger organizational umbrella.

Functional Organizations

A type of organizational structure where the company is divided into smaller groups based on specialized functional areas such as marketing, finance, and engineering.

Network Structure

An organizational design focused on connecting various entities (e.g., departments, organizations) through informal networks rather than hierarchical lines of authority.

Central Core

The primary or most important area, aspect, or concept within a system, organization, or field of study.