If Autonomous Consumption Is $5,000,the MPC Is 0

question 205

Multiple Choice

If autonomous consumption is $5,000,the MPC is 0.7,net taxes are $2,000,investment spending is $4,000,and government purchases equal $2,500,and NX = $0,what is equilibrium GDP?

• A) $14,428.6
• B) $33,666.7
• C) $40,800
• D) $43,000
• E) $45,000

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Definitions:

Barrier To Entry

Factors that make it difficult for new competitors to enter a market, such as high start-up costs or regulatory hurdles.

Price-Control Legislation

Laws enacted by a government to regulate the prices charged for goods and services in the market, often to protect consumers.

Invisible Hand Principle

The tendency of market prices to direct individuals pursuing their own interests to engage in activities promoting the economic well-being of society.

Price-Taker Markets

Markets in which individual buyers or sellers have no influence over the price of a product, typically due to the product being a commodity with many competitors.