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

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Definitions:

Buffer

A temporary storage area used to manage data transfer between devices or processes that operate at different speeds or with different priorities.

Explanation

A statement or account that makes something clear by describing it in more detail or revealing relevant facts.

Positive Statement

A factual assertion that can be tested or verified, often used in economics to describe how the world is, as opposed to how it should be.

Indirect Approach

A communication method where the main point or message is not directly stated at the beginning, often used in writing or speech to build suspense or be polite.