If the MPC in the Economy Is

question 42

True/False

If the MPC in the economy is .75,government could shift the aggregate demand curve rightward by $30 billion by cutting taxes by $10 billion.

---

Definitions:

Times Interest Earned

A financial ratio that measures a company’s ability to meet its interest payments on outstanding debt.

EBIT

EBIT, or Earnings Before Interest and Taxes, represents a company's profit figure that does not take into account expenses stemming from interest and income taxes.

Interest Expense

The cost incurred by an entity for borrowed funds over a period, typically presented in the income statement.

Financial Leverage

Utilizing borrowed funds to enhance the possible yield from an investment.