Econia's Real GDP Is $500 Billion

question 1

Multiple Choice

Econia's real GDP is $500 billion. Full-employment real GDP is $800 billion. The MPC = 2/3. If the full multiplier effect occurs, which of the following policies would move the economy to a full-employment equilibrium?

• A) Increase government purchases by $60 billion.
• B) Increase government purchases by $225 billion.
• C) Increase government purchases by $150 billion.
• D) Increase government purchases by $100 billion.

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Definitions:

Peripheral Vision

The part of a person's field of vision that occurs outside the direct line of sight, enabling one to see objects and movements at the edge of their visual field.

Diabetic Retinopathy

A diabetes complication that affects eyes, characterized by damage to the blood vessels of the retina.

Pathology

The medical science that studies the causes and effects of diseases, especially the structural and functional changes in tissues and organs.

Retinal Blood

Pertains to the blood supply and circulation within the retinal vessels of the eye.