Use the Information Below to Answer the Following Questions

question 106

Multiple Choice

Use the information below to answer the following questions.
Fact 27.5.1
The economy of Beverly Hills has a consumption function of C = 10 + 0.8Y, investment equal to 6, government expenditure equal to 10, exports equal to 10, and an import function of M = 0.1Y.
-Refer to Fact 27.5.1. If autonomous consumption increases by 10, what is the new equilibrium real GDP for this economy?

• A)153.33
• B)120
• C)86.67
• D)460
• E)230

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Definitions:

Housewives

Individuals, traditionally women, who manage households and may or may not engage in paid employment outside the home.

Labor Force

The total number of people who are willing and eligible to work, including both the employed and those seeking employment.

GDP

The Gross Domestic Product, or GDP, is a metric that captures the entire value of goods and services generated within a country over a set period, serving as a gauge of its economic performance.

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of all goods and services produced by an economy in a specific period, using constant prices.