In the Third Quarter of 2008,investment in the U

question 289

Multiple Choice

In the third quarter of 2008,investment in the U.S.totalled $1.4 trillion and in 2007,investment was $1.3 trillion. In addition,third quarter real GDP was $11 trillion.Suppose the MPC in the U.S.is 0.80. Ignoring the effects of imports and taxes,the multiplier is ________ and the change in investment will decrease equilibrium expenditure by ________.

• A) 2; $1 trillion.
• B) 5; $1 trillion.
• C) 2; $200 million.
• D) 5; $500 million.

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Definitions:

Stimulus Habit

The development of a repeated, automatic response to a specific stimulus over time.

Attention

The act of concentrating on a specific object, task, or activity while ignoring irrelevant information or distractions.

Intensity

The degree of strength, force, or concentration of an activity, emotion, or property.

Dim Colours

Colors that have low brightness or saturation, often perceived as subdued or muted.