Suppose That the Multiplier Is 4, Autonomous Investment Rises by $50

question 120

Multiple Choice

Suppose that the multiplier is 4, autonomous investment rises by $50 billion, and autonomous consumption falls by $50 billion at the same time.What will be the effect on equilibrium GDP?  

• A) Equilibrium GDP demanded will decrease by $200 billion. 
• B) Equilibrium GDP demanded will be the same, but the type of goods produced will be different. 
• C) Equilibrium GDP demanded will increase by $200 billion. 
• D) Equilibrium GDP demanded will increase by $400 billion.

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Definitions:

Developed

Having been advanced or brought to a more complex or effective state.

Lifetime

The period during which something is functional or exists, often referring to the duration of a person's life or the operational period of an object or system.

Dominating

An aggressive and controlling conflict style characterized by an individual's pursuit of their own interests at the expense of others'.

Rahim

Refers to M. Afzalur Rahim's work on organizational conflict and conflict management strategies, emphasizing a systematic approach.