Suppose That Planned Autonomous Investment Increases by $200 Billion and That

question 135

Multiple Choice

Suppose that planned autonomous investment increases by $200 billion and that the marginal propensity to consume equals 0.80.The equilibrium level of real GDP will increase by

• A)$40 billion
• B)$160 billion
• C)$200 billion
• D)$250 billion
• E)$1,000 billion

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Definitions:

Surplus Extraction

The process or strategy of obtaining excess resources, typically beyond the equilibrium or expected level, from a market or economy.

Buyer's Valuations

The perceived value or worth that a buyer assigns to a product or service, determining how much they are willing to pay.

Number of Customers

The total count of individuals or entities that purchase goods or services from a business within a specific timeframe.

Lockout

A tactic used by employers to shut employees out of the workplace to pressure them during labor disputes, often in response to strikes or bargaining issues.