Figure 23-4 -Refer to Figure 23-4.Potential GDP Equals $100 Billion.The Economy Is

question 300

Multiple Choice

Figure 23-4
-Refer to Figure 23-4.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:

Rats

Small to medium-sized rodents known for their sharp teeth and adaptability, often used in scientific research or considered pests.

Utility Function

A mathematical representation that ranks preferences or satisfaction levels of an individual or household for different bundles of goods and services.

Consumption

Domestic consumption of various goods and services.

Interest Rate

The annual percentage yield that is charged as interest for borrowing money or paid to investors as a return on investment.