Everything Else the Same, If Government Expenditure Increases by $400

question 25

Multiple Choice

Everything else the same, if government expenditure increases by $400 billion and imports increase by $400 billion, then GDP

• A) decreases by $400 billion.
• B) decreases by $200 billion.
• C) increases by $400 billion.
• D) does not change.
• E) increases by $200 billion.

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Definitions:

P(A Or B)

The probability that at least one of two events, A or B, will occur.

Probability

A measure of the likelihood that an event will occur, expressed as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.

Independent Events

Two or more events where the occurrence or outcome of one event does not affect the occurrence or outcome of the other.

P(A And B)

The probability of both event A and event B occurring together.