-Refer to the above information.In this economy a 3 percentage point decrease in the interest rate will:
A) increase equilibrium GDP by $200.
B) increase equilibrium GDP by $100.
C) increase equilibrium GDP by $50.
D) decrease equilibrium GDP by $50.

Question

-Refer to the above information.In this economy a 3 percentage point decrease in the interest rate will:
A) increase equilibrium GDP by $200. 
B) increase equilibrium GDP by $100. 
C) increase equilibrium GDP by $50. 
D) decrease equilibrium GDP by $50.

Quizplus · Accepted Answer

A decrease in the interest rate typically stimulates investment and consumption, leading to an increase in equilibrium GDP. The given information suggests that a 3 percentage point decrease in the interest rate will increase equilibrium GDP by $100.

-Refer to the Above Information