In a Certain Economy, the Components of Planned Spending Are

question 102

Multiple Choice

In a certain economy, the components of planned spending are given by: C = 500 + 0.8(Y - T) - 300r
Ip = 200 - 400r
G = 200
NX = 10
T = 150
Given the information about the economy above, what would be the impact on short-run equilibrium output of a one-percentage-point increase in the real interest rate, assuming the income-expenditure multiplier equals 5?

• A)Short-run equilibrium output would increase by 35 units.
• B)Short-run equilibrium output would decrease by 700 units.
• C)Short-run equilibrium output would decrease by 35 units.
• D)Short-run equilibrium output would decrease by 7 units.

---

Definitions:

Minority Characteristics

Features or attributes that distinguish minority groups from the majority, often relating to race, ethnicity, culture, or social status.

Uncompromising

Not willing to make concessions or change one's position.

Numerous

A term describing a large quantity or number of items, people, or occurrences.

Unanimous

In full agreement; when all members of a group fully agree on a decision or opinion.