Use the Table Below to Answer the Following Questions

question 151

Multiple Choice

Use the table below to answer the following questions.
Table 27.3.1
The following table shows the relationship between aggregate planned
expenditure and real GDP in the hypothetical economy of Econoworld.

-Refer to Table 27.3.1. If investment increases by $25 billion, the real GDP becomes

• A)$525 billion.
• B)$625 billion.
• C)$725 billion.
• D)$600 billion.
• E)$675 billion.

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Definitions:

Inverse Demand Function

A mathematical representation that expresses the price of a good as a function of the quantity demanded, highlighting how price can be influenced by changes in demand.

Demand Function

An equation that illustrates the quantity of an item that will be purchased at various prices, often factoring in influences like consumer income and tastes.

Price Elasticity

Price elasticity measures the responsiveness of demand or supply of a good to changes in its price.

Absolute Value

The non-negative value of a number without regard to its sign.