Suppose Planned Autonomous Investment Increases by $200 Billion and the Marginal

question 128

Multiple Choice

Suppose planned autonomous investment increases by $200 billion and the marginal propensity to consume equals 0.80.What will be the increase in the equilibrium level of real GDP?  

• A) $160 billion 
• B) $200 billion 
• C) $250 billion 
• D) $1,000 billion

---

Definitions:

Square Root

The number that produces a specified quantity when multiplied by itself (e.g., the square root of 9 is 3).

Exponents

A mathematical notation indicating the number of times a quantity is multiplied by itself.

Evaluate

To calculate the numerical value or simplify an expression.

Calculator

An electronic or mechanical device used to perform mathematical calculations ranging from basic arithmetic to complex equations.