Equilibrium Real GDP Is $400 Billion, the MPC = 0

question 352

Multiple Choice

Equilibrium real GDP is $400 billion, the MPC = 0.9, and there are no income taxes or imports. Investment increases $40 billion. If the price level is constant, after the increase in investment, equilibrium real GDP will be

• A) $440 billion.
• B) $360 billion.
• C) $600 billion.
• D) $800 billion.

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Definitions:

Sensory Memory

The shortest-term element of memory, it is the ability to retain impressions of sensory information after the original stimuli have ended.

Newborn Infants

Babies that are in the first 28 days (4 weeks) of life, experiencing rapid physical growth, and physiological adjustments post-birth.

Adults

Individuals who have reached the age of maturity, typically considered to be 18 years and older.

Poverty

The state of having insufficient financial resources to meet basic living expenses.