If an Increase of $5 Billion in Investment Is Associated

question 346

Multiple Choice

If an increase of $5 billion in investment is associated with an increase of $25 billion in real Gross Domestic Product (GDP) , the multiplier is

• A)1.
• B)3.
• C)5.
• D)7.

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Definitions:

Variable

A characteristic, number, or quantity that can change or vary, taking on different values in a mathematical model, statistical experiment, or real-life situation.

Output

The quantity of goods or services produced by a firm, industry, or economy within a certain period.

AVC

Average Variable Cost, which is the variable cost per unit of output, typically analyzed in the short run.

AVC

Stands for "Average Variable Cost," which is the total variable cost divided by the number of units produced, in the context of economics.