In the Third Quarter of 2008, Investment in the U

question 299

Multiple Choice

In the third quarter of 2008, investment in the U.S. totalled $1.4 trillion and in 2007, investment was
$1) 3 trillion. In addition, third quarter real GDP was $11 trillion. Suppose the MPC in the U.S. is 0.8 Ignoring the effects of imports and taxes, the multiplier is and the change in investment w decrease equilibrium expenditure by .

• A) 5; $1 trillion.
• B) 2; $200 million.
• C) 2; $1 trillion.
• D) 5; $500 million.

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