If Government Spending Increased by $200 Billion and the MPC

question 36

Multiple Choice

If government spending increased by $200 billion and the MPC within the economy was 0.9, what would be the total impact on real GDP?

• A)​$180 billion increase
• B)​$222 billion increase
• C)​$380 billion increase
• D)​$2.0 trillion increase

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Definitions:

Environment

The sum of all external conditions and influences affecting the life, development, and survival of an organism or group of organisms.

Needs Hierarchy

A motivational theory proposed by Abraham Maslow that suggests human needs are arranged in a hierarchy, from most to least important.

Physiological Needs

Basic bodily requirements for human survival, such as air, food, water, shelter, and clothing, according to Maslow's hierarchy of needs.

Self-Esteem

A person's overall subjective sense of personal worth or value, encompassing beliefs about oneself as well as emotional states.