Figure 12-3 -Refer to Figure 12-3.Suppose That Investment Spending Increases by $10

question 112

Multiple Choice

Figure 12-3
-Refer to Figure 12-3.Suppose that investment spending increases by $10 million,shifting up the aggregate expenditure line and GDP increases from GDP1 to GDP2.If the MPC is 0.9,then what is the change in GDP?

• A)$9 million
• B)$10 million
• C)$90 million
• D)$100 million

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Definitions:

Variable Cost Per Unit

The cost that varies with each unit of production or service provided.

Net 30 Credit Policy

A payment term indicating that the payment for goods or services is due 30 days after the invoice date, often used in business-to-business transactions.

Monthly Interest Rate

The interest rate applied to a loan or investment for one month, often used to calculate the monthly interest payments or earnings.