Suppose That the MPC Is 0

question 21

Multiple Choice

Suppose that the MPC is 0.7,there is no investment accelerator,and there are no crowding-out effects.If government expenditures increase by $30 billion,then aggregate demand

• A)shifts rightward by $100 billion.
• B)shifts rightward by $51 billion.
• C)shifts rightward by $170 billion.
• D)shifts rightward by $72.8 billion.

---

Definitions:

Second Grade

An educational level following first grade, typically involving students aged 7 to 8, focusing on developing basic math, reading, and writing skills.

Third Grade

A year or level of education in primary schools in various education systems, typically involving children ages 8 to 9.

Treisman's Attenuation Theory

A theory proposed by Anne Treisman that suggests information is processed at varying levels of attention, where some stimuli are attended to less intensely but not completely filtered out.

Lowered Thresholds

A decrease in the minimum level of stimulus intensity required to produce a perceptible sensation or response.