The Next Questions Refer to the Following Simple Keynesian Model

question 60

Multiple Choice

The next questions refer to the following simple Keynesian model.
Suppose C = 1000 + .9Y, G = 400, I = 100, (X - IM) = 0, and there are no income taxes.
-If government purchases increase by 100,equilibrium GDP will

• A) rise by 25%
• B) rise by a factor of 10
• C) rise by 90
• D) rise by 100
• E) rise by 1,000

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Definitions:

Genetic Program

The set of instructions coded in the DNA that guides the development and function of an organism throughout its life.

Diploid Number

The total number of chromosomes in a cell or organism, representing two sets—one from each parent.

Gametes

Reproductive cells (sperm in males and eggs in females) that unite during fertilization to form a new organism.

Somatic Cells

Any cell of a living organism other than the reproductive cells, forming the body of the organism.