Suppose C = 1000 + .9Y, G = 400, I = 100, (X – IM) = 0, and there are no income taxes. If investment falls by 50, equilibrium GDP will
a) fall by 50
b) fall by 5
c) fall by 500
d) fall by 45
e) fall by half its previous value
c) fall by 500
You might also like to view...
Use the following graph for a monopolistically competitive firm to answer the next question. 
Excess capacity for this firm would be illustrated by the quantity
A. E - D. B. D - 0. C. D - C. D. E - C.
Using the long-run ISLM model, explain and demonstrate graphically the neutrality of money, for the case of an increase in the money supply
What will be an ideal response?
One of the primary objectives of the WTO is:
a. to create trade restrictions across the countries. b. to reduce trade barriers created by the different countries. c. to enable certain countries to maintain their autarkic conditions. d. to enable the western countries to emerge as major players in the international trade. e. to redistribute wealth from the first world to the third world countries.
A good is classified as inferior if:
A. consumers buy less when the price rises. B. consumers buy less when income rises. C. consumers buy less when the price falls. D. consumers buy more when income rises.