Figure 12-3 -Refer to Figure 12-3.Suppose That Government Spending Increases,shifting Up the Increases,shifting

question 59

Multiple Choice

Figure 12-3
-Refer to Figure 12-3.Suppose that government spending increases,shifting up the aggregate expenditure line.GDP increases from GDP₁ to GDP₂,and this amount is $400 billion.If the MPC is 0.75,then what is the distance between N and L or by how much did government spending change?

• A)$10 billion
• B)$100 billion
• C)$200 billion
• D)$300 billion