Suppose Planned Investment Increases by $200 Billion and the Marginal

question 135

Multiple Choice

Suppose planned investment increases by $200 billion and the marginal propensity to consume equals 0.80.By what amount will the aggregate expenditure line shift upward at every level of real GDP?  

• A) by $40 billion 
• B) by $160 billion 
• C) by $200 billion 
• D) by $250 billion

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Definitions:

Paleolithic Period

An era in prehistory, also known as the Old Stone Age, marked by the use of stone tools by early humans.

Artisan Specialties

Unique crafts or products made by skilled craftspeople, often by hand or using traditional methods.

Big-Game Hunting

Big-game hunting involves the tracking and hunting of large animals, often for food, sport, or traditional cultural practices.

Microlith

Small, often pointed stone tools that were part of the toolkit in prehistoric times, used as spear points or arrowheads.