Use the Following to Answer Questions

question 48

Multiple Choice

Use the following to answer questions .
Exhibit: Real GDP and the Multiplier

-(Exhibit: Real GDP and the Multiplier) Holding everything else constant, if net exports fall by $400 billion, equilibrium real GDP will decrease

• A) $1,000 billion.
• B) $800 billion.
• C) $500 billion
• D) $400 billion.

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Definitions:

Coupon Interest Rate

The annual interest rate paid on a bond, expressed as a percentage of the face value.

Market Interest Rate

The prevailing rate of interest available in the market on loans, bonds, and other financial instruments.

Semi-Annual

Occurring twice a year, typically every six months.

Long-Term Notes

Debt securities with a maturity date longer than one year, representing borrowed funds that need to be repaid.