Use the Information Below to Answer the Following Questions

question 17

Multiple Choice

Use the information below to answer the following questions.
Fact 27.3.1
An economy has a fixed price level, no imports, and no income taxes. MPC is 0.5 and real GDP is $200 billion. Businesses increase investment by $2 billion.
-Consider Fact 27.3.1. The increase in real GDP is

• A)$2 billion.
• B)$4 billion.
• C)$202 billion.
• D)$404 billion.
• E)$1.6 billion.

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Definitions:

Liabilities

Financial obligations or debts that a company owes to others, which must be settled over time through the transfer of economic benefits including money, goods, or services.

Internal Transactions

financial events that affect the internal accounting of an organization without involving another entity.

External Transactions

Financial activities involving an entity and another party outside the entity, such as sales, purchases, and financing agreements.

Basic Accounting Equation

The fundamental principle of accounting: Assets = Liabilities + Equity, reflecting the balance of a company's financial position.