If the economy is in equilibrium at $1,000 billion national income and if the multiplier is 3 and intended investment is $400 billion, what happens to national income when intended investment decreases to $380 billion? It will
a. increase to $1,020 billion
b. increase to $1,060 billion
c. decrease to $980 billion
d. decrease to $940 billion
e. decrease to $970 billion
D
You might also like to view...
Refer to Table 2-4. Assume Dina's Diner only produces sliders and hot wings. A combination of 60 sliders and 25 hot wings would appear
A) along Dina's production possibilities frontier. B) inside Dina's production possibilities frontier. C) outside Dina's production possibilities frontier. D) at the vertical intercept of Dina's production possibilities frontier.
According to Tobin's q theory, the principal objective of investment is ________
A) to increase eligibility for the investment tax credit B) to expand production C) to increase the market value of the firm D) to lower the replacement cost of installed capital
Substitutes are pairs of products with
a. positive cross-price elasticity of demand b. negative cross-price elasticity of demand c. positive income elasticity of demand d. negative income elasticity of demand e. positive price elasticity of demand
The accompanying figure shows Becky's daily production possibilities curve for dresses and skirts.
Relative to point X, at point Y:
A. fewer skirts and fewer dresses are produced. B. more dresses and fewer skirts are produced. C. more dresses and more skirts are produced. D. more skirts and fewer dresses are produced.