If the Price Level Is Constant and the Slope of the AE

question 78

Multiple Choice

If the price level is constant and the slope of the AE curve is 0.75, a decrease in investment of $100 leads to a decrease in real GDP of

• A) $25.
• B) $100.
• C) $800.
• D) $400.

---

Definitions:

Offer Price

The price at which a seller is willing to sell a security or asset, often differing from the bid or purchase price offered by a buyer.

Underwriters

Financial specialists who assess and take on certain risks by guaranteeing to pay a certain amount for securities offered by a corporation or government.

Best-efforts Offering

A type of securities underwriting where the underwriter agrees to sell as much of the offering as possible, but not to purchase the securities outright.

Syndicate

A group of individuals or organizations that come together to conduct business or pursue a common goal, often used in reference to investment and banking sectors.