If You Were Told the MPC Was = 0

question 64

Multiple Choice

If you were told the MPC was = 0.75 and the government engaged in a tax decrease of $400B, then the overall change in GDP would be:

• A) $400B.
• B) $1600B.
• C) $300B.
• D) $1200B

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Definitions:

Accounting Profits

The total revenue of a business minus the explicit costs and depreciation expenses; it's a measure of a company's financial performance according to standard accounting principles.

Most Efficient Output

Refers to the highest amount of goods or services that can be produced with a given set of resources and technology without wasting any resources.

Computerization

The process of applying computer technology and systems to automate tasks, processes, and operations, transforming how work is done, data is managed, and information is shared.

Perfect Competition

A market structure characterized by a complete absence of rivalry among the producers, with many buyers and sellers, where all entities sell an identical product.