Use the Following to Answer Questions

question 48

Multiple Choice

Use the following to answer questions .
Exhibit: Real GDP and the Multiplier

-(Exhibit: Real GDP and the Multiplier) Holding everything else constant, if net exports fall by $400 billion, equilibrium real GDP will decrease

• A) $1,000 billion.
• B) $800 billion.
• C) $500 billion
• D) $400 billion.

---

Definitions:

Perfectly Competitive Market

A market structure characterized by many buyers and sellers, all producing a homogenous product, with no single entity able to influence the market price.

Marginal Revenue

The extra income a company earns by selling an additional unit of a product or service.

Slope

The measure of the steepness or/incline of a line, representing the ratio of the vertical change to the horizontal change between two points on the line.

Average Revenue

The revenue generated per unit of output sold, calculated by dividing total revenue by the number of units sold.