Refer to the information provided in Figure 8.11 below to answer the questions that follow. Figure 8.11
-Refer to Figure 8.11. A ________ increase in investment changes equilibrium output to $240 million.
A) $5 million
B) $10 million
C) $20 million
D) $50 million

Question

Refer to the information provided in Figure 8.11 below to answer the questions that follow.  Figure 8.11
-Refer to Figure 8.11. A ________ increase in investment changes equilibrium output to $240 million.
A) $5 million 
B) $10 million 
C) $20 million 
D) $50 million

Quizplus · Accepted Answer

An increase in investment leads to a multiplier effect on the equilibrium output. Without the specific details of the multiplier or the figure, a common economic principle is that a relatively small increase in investment can lead to a larger increase in total output due to the multiplier effect. Given the options, a $10 million increase is a plausible amount that could result in a significant change in equilibrium output, assuming a multiplier greater than 1. However, without the specific details from Figure 8.11, this explanation relies on general economic principles.

Refer to the Information Provided in Figure 8