If an Economy's MPC Is 0

question 93

Multiple Choice

If an economy's MPC is 0.8 and the MPM is 0.05, then an increase in government spending of $2,000 will increase income by

• A) $5,500.
• B) $8,000.
• C) $10,000.
• D) $20,000.

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Definitions:

Bankruptcy Cases

Legal processes initiated by individuals or businesses unable to repay their debts, seeking relief from some or all of their financial obligations.

Federal District Courts

The trial courts of the United States federal court system where civil and criminal cases are initially filed and adjudicated.

Collateral Matters

Topics or issues that are indirectly related to the main subject at hand.

Obligation

A legal or moral duty to do or not do something, often arising from a contract or promise.