Suppose the multiplier is 2.5 and investment increases by $20 billion.Starting at potential GDP, in the long run, equilibrium real GDP
A)increases by $50 billion.
B)increases by more than $50 billion.
C)decreases by less than $50 billion.
D)increases by an amount greater than zero but less than $50 billion.
E)does not change.

Question

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The Answer of Suppose the multiplier is 2.5 and investment increases by $20 billion.Starting at potential GDP, in the long run, equilibrium real GDP
A)increases by $50 billion.
B)increases by more than $50 billion.
C)decreases by less than $50 billion.
D)increases by an amount greater than zero but less than $50 billion.
E)does not change.

Suppose the Multiplier Is 2