If Government Spending Increased by $50 Billion and the MPC

question 29

Multiple Choice

If government spending increased by $50 billion and the MPC within the economy was 0.8, what would be the total impact on real GDP?

• A)$62.5 billion decrease
• B)​$62.5 billion increase
• C)​$250 billion decrease
• D)​$250 billion increase

---

Definitions:

Ethics

The philosophical study of morality.

Normative Theory

A framework that describes how things should be or how societal norms and standards guide individual actions and institutional practices.

Leader Position Power

The authority and influence possessed by a leader, derived from their official status or position within an organization.

Task Structure

Refers to the defined organization, clarity, and procedures of a task, including how its goals are supposed to be achieved.