Refer to Figure 23-3

question 63

Multiple Choice

Refer to Figure 23-3. Suppose that government spending increases,shifting up the aggregate expenditure line. GDP increases from GDP₁ to GDP₂,and this amount is $200 billion. If the MPC is 0.8,then what is the distance between N and L or by how much did government spending change?

• A) $16 billion
• B) $40 billion
• C) $200 billion
• D) $1,000 billion

---

Definitions:

Cash Payment

A transaction where the payment for goods or services is made using physical currency or through an immediate electronic transfer of funds.

Grand Opening Sale

A promotional event conducted to attract customers to a new business or service, offering products at reduced prices for a limited time to generate interest and traffic.

Letter of Credit

A financial document issued by a bank guaranteeing a buyer's payment to a seller within a specified timeframe.

International Sale

The transaction of goods or services across national borders, subject to international trade laws and regulations.