Suppose That Planned Investment Increases by $200 Billion and That

question 71

Multiple Choice

Suppose that planned investment increases by $200 billion and that the marginal propensity to consume equals 0.80.The aggregate expenditure line will shift upward by __________ at every level of real GDP.

• A)$40 billion
• B)$160 billion
• C)$200 billion
• D)$250 billion
• E)$1,000 billion

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Definitions:

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A landlocked country located in the South Caucasus region of Eurasia, known for its rich history, cultural heritage, and as one of the earliest Christian civilizations.

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An alcoholic beverage made from fermented grapes or other fruits, varying greatly in flavor and style.

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The act of feeding a baby with milk directly from the mother's breast, providing essential nutrients and antibodies.

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A community of individuals who share common cultural practices, linguistic or religious traditions, heritage, or characteristics.