Equilibrium Real GDP Is $400 Billion, the MPC = 0

question 352

Multiple Choice

Equilibrium real GDP is $400 billion, the MPC = 0.9, and there are no income taxes or imports. Investment increases $40 billion. If the price level is constant, after the increase in investment, equilibrium real GDP will be

• A) $440 billion.
• B) $360 billion.
• C) $600 billion.
• D) $800 billion.

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