Suppose the MPC Is 0

question 55

Multiple Choice

Suppose the MPC is 0.60.Assume there are no crowding out or investment accelerator effects.If the government increases expenditures by $200 billion,then by how much does aggregate demand shift to the right? If the government decreases taxes by $200 billion,then by how much does aggregate demand shift to the right?

• A)$300 billion and $180 billion
• B)$300 billion and $300 billion
• C)$500 billion and $300 billion
• D)$500 billion and $500 billion

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Definitions:

Informal Way

A manner of communication or behavior that is casual, relaxed, and not bound by formal rules or standards.

Behavioral Question

A query used in interviews that asks candidates to describe past behavior as an indicator of their future performance in similar situations.

Leadership

The art of motivating a group of people towards achieving a common goal.

Decisive Thinking

The ability to make quick, effective decisions with firmness.