Calculate the new real GDP and explain why real GDP increases by more than $5 billion
What will be an ideal response?
Real GDP was initially $150 billion. The increase in investment increased real GDP by $25 billion, so real GDP increases to $175 billion. Real GDP increases by more than the initial increase in investment because the increase in investment increases disposable income which induces additional increases in consumption expenditure. So real GDP increases both because investment increases and also because of induced increases in consumption expenditure.
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In monopolistic competition
A) each firm's price cannot deviate from the average price of other firms. B) each firm supplies a small part of the total market output. C) one firm's actions directly affect the actions of the other firms. D) collusion is possible.
Are checks money?
What will be an ideal response?
Exhibit 36-1 Bond FaceValueof Bond Price ofthe Bond Annual CouponPayment A $1,000 $850 $25 B $1,000 $950 $41 C $1,000 $1,100 $52 D $1,000 $1,100 $32 E $1,000 $1,000 $50 Refer to Exhibit 36-1. The coupon rate for bond A is
A. 2.5 percent. B. 2.9 percent. C. 7.5 percent. D. 0.025 percent.
Which best describes the relationship between the cost of acquiring information and return?
A) A high return must compensate for a high cost of acquiring information. B) A higher cost of information corresponds with a low return. C) A low cost of acquiring information corresponds with a high return. D) A higher return results in a lower cost of acquiring information.