If the MPC Is 0

question 86

Multiple Choice

If the MPC is 0.70 and investment increases by $3 billion, the equilibrium GDP will

• A) increase by $10 billion.
• B) increase by $2.10 billion.
• C) decrease by $4.29 billion.
• D) increase by $4.29 billion.

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Definitions:

Demand Instrument

A financial document that requires immediate payment upon presentation.

Specific Time

A precise or particular moment or duration identified for an event or action.

Negotiable Instrument

A written document guaranteeing the payment of a specified amount of money, either on demand or at a set time.

Relative Permanence

The quality of a negotiable instrument that ensures its longevity.