Suppose That the Level of GDP Increased by $100 Billion

question 128

Multiple Choice

Suppose that the level of GDP increased by $100 billion in an economy where the marginal propensity to consume is 0.5.The initial change in spending must have been:

• A)$100 billion.
• B)$50 billion.
• C)$500 billion.
• D)$5 billion.