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-Refer to the Table in the Exhibit

question 24

Multiple Choice

 Real  GDP ($)  Consumption ($)  Planned  investment ($)  Government  purchases ($) 1,8001,5401002001,9001,6201002002,0001,7001002002,1001,7801002002,2001,8601002002,3001,940100200\begin{array} { c c c c } \hline \begin{array} { c } \text { Real } \\\text { GDP } \\( \$ ) \end{array} & \begin{array} { c } \text { Consumption } \\( \$ ) \end{array} & \begin{array} { c } \text { Planned } \\\text { investment } \\( \$ ) \end{array} & \begin{array} { c } \text { Government } \\\text { purchases } \\( \$ ) \end{array} \\\hline 1,800 & 1,540 & 100 & 200 \\1,900 & 1,620 & 100 & 200 \\2,000 & 1,700 & 100 & 200 \\2,100 & 1,780 & 100 & 200 \\2,200 & 1,860 & 100 & 200 \\2,300 & 1,940 & 100 & 200 \\\hline\end{array}
-Refer to the table in the exhibit.Suppose government purchases increased to $100.What would be the effect on equilibrium real GDP demanded?  

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Definitions:

Marginal Costs

The additional charge associated with making one more unit of a product or service.

Fixed Capital

Assets and investments in physical goods such as buildings and machinery that are not consumed in the production process.

Variable Labor

Labor costs that vary directly with the level of production or business activity.

Average Cost

The total cost divided by the number of units produced, indicating the cost per unit of output.

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