If the MPC = 0.8, and planned autonomous investment increases by $80 billion, then equilibrium real GDP will increase by
A. $80 billion.
B. $400 billion.
C. $320 billion.
D. $64 billion.
Answer: B
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A physician who laid off her nurse and receptionist and performed their tasks herself would probably
A) decrease her accounting profit but increase her economic profit. B) decrease her profit from the economist's point of view even if she increased her accounting profit. C) increase both her accounting and economic profit if her practice was a busy one. D) wind up with lower labor costs unless the layoff greatly increased the demand for her professional services. E) work more efficiently in order to get everything done.
In the foreign exchange market, what factor leads to a movement along the demand curve for dollars?
What will be an ideal response?
Under the gold standard, the government must have enough gold to back up any
A) change in its currency's exchange rate. B) foreign currency deposits in its central bank. C) increase in money demand. D) increase in the money supply.
Suppose the firms in a monopolistically competitive market are earning positive economic profits. What will happen to move the market to its long-run equilibrium?
A) The firms' demand curves will become less elastic. B) The demand curves faced by firms in the market will shift to the right. C) More close substitutes will appear in the market. D) Some firms will exit the market if they can't cover all of their fixed and variable costs.