If Autonomous Investment Increases by $200 Billion and the Marginal

question 286

Multiple Choice

If autonomous investment increases by $200 billion and the marginal propensity to consume (MPC) is 0.5, then

• A)real Gross Domestic Product (GDP)will rise by $400 billion.
• B)real Gross Domestic Product (GDP)will rise by $200 billion.
• C)real Gross Domestic Product (GDP)will rise by $100 billion.
• D)real Gross Domestic Product (GDP)will decrease by $100 billion.

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Definitions:

Positive Difference

The result of subtracting a smaller number from a larger number, ensuring a non-negative result.

Fair 6-Sided Dice

A classic dice with six faces, each showing a number from one to six, where each number has an equal likelihood of appearing on a roll.

Record

An account or report documenting the occurrence or performance of something, often kept in writing or another permanent form.

Fair Coin

A hypothetical coin that has an equal probability of landing on heads or tails when flipped.