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:

Transmission

The act or process of transferring something from one place, person, etc., to another, commonly used in contexts like the transmission of electrical power or infectious diseases.

Serviced

Serviced refers to the process of maintaining, supporting, or providing necessary work to ensure a product, system, or facility operates correctly.

Carwash

A facility or business where vehicles are cleaned, often both externally and internally, using various cleaning methods and equipment.

Mutual Benefit Bailment

An arrangement where both the bailor and bailee receive some benefit from the bailment, such as a loaned item or use of property.