If Autonomous Investment Increases by $100 Million and the Marginal

question 81

Multiple Choice

If autonomous investment increases by $100 million and the marginal propensity to consume (MPC) is 0.75, then

• A) real Gross Domestic Product (GDP) will rise by $400 million.
• B) real Gross Domestic Product (GDP) will rise by $100 million.
• C) real Gross Domestic Product (GDP) will rise by $200 million.
• D) real Gross Domestic Product (GDP) will fall by $200 million.

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Definitions:

SWOT Acronym

Stands for Strengths, Weaknesses, Opportunities, and Threats, a framework used for strategic planning and analysis.

Confirmation Bias

The predisposition to perceive incoming evidence as ratification of one's established beliefs or theoretical frameworks.

Survey Research

A research method that collects data from a predefined group of respondents to gain information and insights on various topics of interest.

Escalation Commitment

The phenomenon where people continue to invest time, money, or effort into a failing project due to the cumulative prior investment, despite new evidence suggesting that the cost of continuing the project outweighs the expected benefit.