Suppose That Real GDP Is Initially $13 Trillion and the Government

question 89

Multiple Choice

Suppose that real GDP is initially $13 trillion and the government attempts to increase real GDP to $14 trillion. The marginal propensity to consume is 0.75, and every $1.00 increase in real government spending crowds out $0.50 in real planned investment expenditures. How much increase in real government spending could lead to the desired level of real GDP?

• A)$200 billion
• B)$250 billion
• C)$500 billion
• D)$1 trillion

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Definitions:

Convulsive Behaviors

Involuntary, rapid movements or convulsions, often associated with neurological disorders or seizure activity.

Brain Functioning

The activities and processes that occur in the brain, enabling thought, memory, emotion, movement, and other aspects of cognition and behavior.

Hyperexcitability

An increased sensitivity or responsiveness to stimuli, which can manifest in nervous or muscular systems.

Stimulus Deprivation

refers to a lack of sensory input or stimulation, which can lead to various cognitive and psychological effects.