An economy has no imports or income taxes.The MPC is 0.75 and real GDP is $120 billion.Businesses increase investment by $4 billion.The expenditure multiplier is ________ and the change in real GDP from the increase in investment is ________ billion.
A) 5; $25
B) 4; $16
C) 5; $16
D) 4; $25
E) 0.75; $3
Correct Answer:
Verified
Q179: If autonomous spending decreases, then
A) equilibrium expenditure
Q180: According to the aggregate expenditure model, when
Q181: In an economy with no income taxes
Q182: When the multiplier is _ , an
Q183: If the marginal propensity to consume is
Q185: If autonomous spending increases by $500 billion
Q186: As a result of an initial increase
Q187: An economy has no imports or income
Q188: An economy has no imports or income
Q189: 
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