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

Understand the effect of government policy changes on demand elasticity.

Apply the concept of marginal analysis in production decisions.

Describe the differences between types of goods based on income changes.

Analyze the effects of price changes on revenue depending on demand elasticity.

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