The multiplier is 2.5 and the SAS curve is upward sloping. Investment increases by $20 billion. In the short run, equilibrium real GDP will
A) increase by $50 billion.
B) increase by less than $50 billion.
C) decrease by $50 billion.
D) decrease by less than $50 billion.

Question

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The Answer of The multiplier is 2.5 and the SAS curve is upward sloping. Investment increases by $20 billion. In the short run, equilibrium real GDP will
A) increase by $50 billion.
B) increase by less than $50 billion.
C) decrease by $50 billion.
D) decrease by less than $50 billion.

The Multiplier Is 2