Suppose an economy has no imports (MPI, m = 0). The MPC (c) is 0.75 and real GDP is $120billion. Businesses increase investment by $4 billion. The multiplier isin real GDP from the increase in investment isand the changebillion.O a. 5; $16O b. 4; $25O C. 5; $25O d. 4; $16e. 0.75; $3

Given; MPC= 0.75 Real GDP=$120 billion Increase in investment= $4 billion

Suppose an economy has no imports (MPI, m = 0). The MPC (c) is 0.75 and real GDP is $120 billion. Businesses increase investment by $4 billion. The multiplier is and the change in real GDP from the increase in investment is billion. O a. 5; $16 O b. 4; $25 Ос. 5; $25 O d. 4; $16 О е. 0.75;B $3

Suppose an economy has no imports (MPI, m = 0). The MPC (c) is 0.75 and real GDP is $120 billion. Businesses increase investment by $4 billion. The multiplier is and the change in real GDP from the increase in investment is billion. O a. 5; $16 O b. 4; $25 Ос. 5; $25 O d. 4; $16 О е. 0.75;B $3

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Suppose an economy has no imports (MPI, m = 0). The MPC (c) is 0.75 and real GDP is $120
billion. Businesses increase investment by $4 billion. The multiplier is
in real GDP from the increase in investment is
and the change
billion.
O a. 5; $16
O b. 4; $25
O C. 5; $25
O d. 4; $16
e. 0.75; $3

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