Consider an Economy That Is in Equilibrium with Real GDP

question 103

Multiple Choice

Consider an economy that is in equilibrium with real GDP = $5, 000, MPS= 1/4 and MPI = 1/5.What will be the new equilibrium level of income if planned investment spending increases by $500?

• A)$15, 000
• B)$7, 000
• C)$6, 111
• D)$5, 500
• E)$5, 000

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Definitions:

Social Ties

Connections between individuals that provide social support and can influence their social behavior and mental health.

Implosive Therapy

A therapeutic technique where individuals are exposed rapidly and intensely to stimuli or situations that cause them anxiety, aiming to desensitize them to the feared objects or situations.

Avoidance Responses

Behaviors aimed at evading certain thoughts, feelings, or situations that are perceived as uncomfortable or threatening.

Frightening Images

These are visually disturbing or scary mental representations, which can be a source of anxiety, phobias, or distress in individuals.