In the Keynesian-Cross Model, If the MPC Equals 0

question 72

Multiple Choice

In the Keynesian-cross model, if the MPC equals 0.75, then a $1 billion decrease in taxes increases planned expenditures by ______ and increases the equilibrium level of income by ______.

• A) $1 billion; more than $1 billion
• B) $0.75 billion; more than $0.75 billion
• C) $0.75 billion; $0.75 billion
• D) $1 billion; $1 billion

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Definitions:

Radiation

The emission of energy as electromagnetic waves or as moving subatomic particles, especially high-energy particles that cause ionization.

Mammogram

An X-ray examination of the breast used to detect and diagnose breast diseases, especially breast cancer, in women.

Analgesic

A type of medication that reduces or eliminates pain without causing loss of consciousness.

Menstrual Cycle

The regular natural change that occurs in the female reproductive system that makes pregnancy possible, including the shedding of the lining of the uterus.