Assume the MPC Is

question 148

Multiple Choice

Assume the MPC is .8.If government were to impose $50 billion of new taxes on household income, consumption spending would decrease by:

• A)$100 billion.
• B)$40 billion.
• C)$90 billion
• D)$50 billion.

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Definitions:

Supply Chain

The network of organizations involved in producing, delivering, and selling goods and services, from the acquisition of raw materials to the final consumer.

Crossover Point

The point at which two different options have equal costs or benefits, influencing a change in decision.

Fixed Costs

Costs that do not vary with the volume of production, such as rent, salaries, and insurance.

Variable Costs

Expenses that vary directly with the amount of production or operational activity within a company.