Assume that the full-employment level of output is $2,000 and the price level associated with full-employment output is 100. Also assume that the economy's current level of output is $1,900 and at the price level of 100 current aggregate demand is $1,820. If the government moves the economy back to the full-employment level of output by reducing taxes by $60, then the MPC equals
A. 0.6.
B. 0.75.
C. 0.5.
D. 0.8.
Answer: B
Economics