Assume that the MPC is .75, and investment spending rises by $25 billion.How much will real GDP change?
A) $25 billion
B) $75 billion
C) $100 billion
D) $175 billion
Correct Answer:
Verified
Q143: Investment spending
A)cannot be stimulated by decreasing the
Q150: If an economy at the equilibrium level
Q153: Figure 9-4 Q161: The multiplier principle illustrates that Q162: Businesses in the United States cut their Q165: The formula for the multiplier can be Q167: The effect throughout the entire economy of Q172: The multiplier principle is built on the Q174: The basic reason for the multiplier effect Q177: The actual multiplier for the U.S.economy is
A)an increase in
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