Refer to Figure 23-3. Suppose that investment spending decreases by $5 million, decreasing aggregate expenditure and decreasing real GDP from GDP2 to GDP1. If the MPC is 0.8, then what is the change in GDP?

A) -$4 million B) -$5 million C) -$25 million D) -$40 million


C

Economics

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The term "depository institution" refers to

A) savings and loan associations only. B) commercial banks, credit unions, and savings and loan associations. C) credit unions only. D) commercial banks only.

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Arguments for the balanced budget amendment include all of the following EXCEPT

A) a balanced budget amendment would limit Congress from using fiscal policy during a recession. B) a balanced budget amendment would increase capital formation. C) a balanced budget amendment would reduce the taxation burden on future generations. D) a balanced budget amendment would exert fiscal discipline on the federal government.

Economics

One macroeconomic goal is to achieve an unemployment rate of zero

a. True b. False

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If the price of a good decreases by 5% and the quantity demanded remains unchanged, then at that price, the good is

A. elastic. B. perfectly elastic. C. inelastic. D. perfectly inelastic.

Economics