Describe the differences between capitalism and socialism.
Question 2
Use the aggregate expenditures model and assume the marginal propensity to consume (MPC) is 0.80 . A decrease in government spending of 1 billion would result in a decrease in GDP of:
a. 0.
b. 0.8 billion.
c. 1.0 billion.
d. 5.0 billion.
e. 8.0 billion.