If the Multiplier Is 3,a $20 Billion Increase in Autonomous

question 119

Multiple Choice

If the multiplier is 3,a $20 billion increase in autonomous consumption will cause a

• A)$20 billion increase in equilibrium consumption
• B)$60 billion increase in equilibrium consumption
• C)$20 billion increase in equilibrium real GDP demanded
• D)$60 billion increase in equilibrium real GDP demanded
• E)$60 billion decrease in autonomous saving

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Definitions:

Exchange Notes

Financial instruments or agreements between parties to swap different forms of financial assets, liabilities, or payments agreed upon conditions and terms.

Receivable

An amount of money owed to a business by its customers or clients for goods or services delivered or used but not yet paid for.

Allowance for Doubtful Accounts

A contra-asset account that reduces accounts receivable to its net realizable value, representing estimated uncollectible amounts.

Liability Account

An accounting record that tracks the money owed by a business to creditors, lenders, and suppliers, part of the company's liabilities.