Question 14 2 pts If the multiplier is 4, equilibrium real GDP is $600 billion,

Question

Question 14 2 pts If the multiplier is 4, equilibrium real GDP is $600 billion, and investment is $25 billion, what will happen if investment increases to $30 billion? Real GDP will: O decrease to $595 billion O increase to $605 billiorn O decrease to $580 billion O increase to $620 billion O increase to $624 billiorn Question 15 2 pts Within the Keynesian aggregate expenditures model, which of the following autonomous changes would decrease the equilibrium output? O A decrease in investment spending 0 An increase in government spendng O An increase in net exports O An increase in consumption expenditures

Explanation / Answer

1) Solution: increase to $620 billion

Working:

Change in investment * Multiplier = ($30 billion - $25 billion) * 4 = $20 billion

Real GDP: 600 billion + 20 billion = $620 billion

2) Solution: Solution: A decrease in investment spending

Explanation: The autonomous changes would reduce equilibrium output with a fall in investment spending because less investment would decrease the equilibrium output

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.