If Autonomous Investment Decreases by $60 Billion,equilibrium Real GDP Demanded $\times$

question 2

Multiple Choice

If autonomous investment decreases by $60 billion,equilibrium real GDP demanded will

• A)increase by $60 billion
• B)decrease by $60 billion
• C)decrease by ($60 billion)\(\times\) MPC
• D)decrease by $60 billion \(\times\) (1 - MPC)
• E)decrease by $60 billion/MPS

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Definitions:

Accounts Receivable

These are funds owed to a company by customers for goods or services delivered or used but not yet paid for; considered a current asset on the balance sheet.

Industrial Firms

Companies engaged in the production of goods within an industrial sector, including manufacturing, construction, and mining activities.

Assets

Resources owned or controlled by a business, entity, or individual, expected to produce economic value or future benefits.

Economic Order Quantity

A formula used to determine the optimal order size that minimizes the total inventory holding costs and ordering costs.