Figure 12-4 -Refer to Figure 12-4.Potential GDP Equals $100 Billion.The Economy Is

question 261

Multiple Choice

Figure 12-4
-Refer to Figure 12-4.Potential GDP equals $100 billion.The economy is currently producing GDP₁ which is equal to $90 billion.If the MPC is 0.8,then how much must autonomous spending change for the economy to move to potential GDP?

• A)-$18 billion
• B)-$2 billion
• C)$2 billion
• D)$18 billion

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Definitions:

Pure Monopoly

A market structure where a single firm is the sole provider of a product or service, facing no competition.

Demand Factors

Elements that influence the level of demand for a product or service, such as price, consumer preferences, income levels, and market trends.

Willingness

The readiness or inclination of people to engage in a particular action, such as purchasing a product or adopting a service.

Ability To Pay

A concept referring to an individual's or entity's capacity to cover a financial obligation, often considered in tax policy and healthcare.