Suppose That GDP (Y) Is 5,000

question 102

Multiple Choice

Suppose that GDP (Y) is 5,000. Consumption (C) is given by the equation C = 500 + 0.5(Y - T) . Investment (I) is given by the equation I = 2,000 - 100r, where r is the real interest rate in percent. Government spending (G) is 1,000 and taxes (T) is also 1,000. When a technological innovation changes the investment function to I = 3,000 - 100r:

• A) I rises by 1,000 and r rises by 10 percentage points.
• B) I rises by 1,000 and r is unchanged.
• C) I is unchanged and r rises by 10 percentage points.
• D) I is unchanged and r rises by 15 percentage points.

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Definitions:

Prostate Gland

A gland in the male reproductive system that secretes a fluid that nourishes and protects sperm, part of the seminal fluid.

Uterine Horns

The points where the uterus and the fallopian tubes meet in some animals, such as cats and dogs; not present in humans who have a single uterine body.

Ovaries

Female reproductive organs in vertebrates that produce eggs and hormones, including estrogen and progesterone.

Uterus

The female reproductive organ where a fertilized egg implants and develops into a fetus.