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If the Multiplier Is 3, Equilibrium Real GDP Is $1,000

Question 108

Multiple Choice

If the multiplier is 3, equilibrium real GDP is $1,000 billion, and investment is $400 billion, what will happen if investment decreases to $380 billion? Real GDP will:


A) increase to $1,020 billion.
B) increase to $1,060 billion.
C) decrease to $980 billion.
D) decrease to $940 billion.
E) decrease to $970 billion.

Correct Answer:

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