An Economy Is at a Real GDP Level of $800

question 12

Multiple Choice

An economy is at a real GDP level of $800 billion. Autonomous planned spending falls by $40 billion. If the MPC = .8, what will be the new real GDP level after the full potential multiplier effect occurs?

• A) $750 billion
• B) $600 billion
• C) $1,000 billion or $1 trillion
• D) $1,130 billion or $1.230 trillion

---

Definitions:

Weld-sealed

A term describing items or components that have been permanently joined or sealed together through welding, creating a strong and often airtight connection.

Torque Multiplication

Occurs during the vortex flow phase of torque converter operation.

Welded Halves

This term typically refers to two parts that have been joined together permanently by welding.

Allison

A manufacturer known for producing automatic transmissions, especially for heavy-duty vehicles and equipment.