Assume the MPC Is 0

question 100

Multiple Choice

Assume the MPC is 0.65.Assuming only the multiplier effect matters,a decrease in government purchases of $20 billion will shift the aggregate demand curve to the

• A)left by about $30.77 billion.
• B)left by about $57.1 billion.
• C)right by about $57.1 billion.
• D)right by about $30.77 billion.

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Definitions:

Stepping Motions

The movements or actions resembling steps, often observed in infants as a precursor to walking.

Accommodation

in psychology, the process of adapting or adjusting one's cognitive schemas and perceptions to incorporate new information or experiences.

Cognitive Process

The mental actions or operations involved in learning, thinking, and understanding; it encompasses perception, memory, judgment, and reasoning.

Disequilibrium

A state of imbalance or instability, often used in economics to describe markets where supply and demand are not in balance, and in psychology, to describe the conflict experienced when existing knowledge does not fit with new information.