Suppose That in an Economy with an MPC of

question 217

Multiple Choice

Suppose that in an economy with an MPC of .8 the government wanted to shift the aggregate demand curve leftward by $40 billion at each price level to remedy demand-pull inflation.It could:

• A)increase taxes by $10 billion.
• B)reduce government spending by $40 billion.
• C)reduce government spending by $5 billion.
• D)increase taxes by $20 billion.

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Definitions:

Reflective Style

A communication or thinking approach that focuses on contemplation, introspection, and careful consideration of one’s own experiences and actions.

Supportive Style

Refers to a leadership approach that emphasizes assistance and empathy towards employees’ needs and challenges.

Serious Attitude

Exhibiting a sincere and earnest approach towards tasks, responsibilities, or situations.

Reflective Communication Style

A communication approach that involves actively listening, understanding the speaker’s message, and responding thoughtfully and empathetically.