The Economy Is in Equilibrium,TP = TE,and Real GDP Is

Multiple Choice

The economy is in equilibrium,TP = TE,and Real GDP is $2,000 billion.The MPC is 0.75,the multiplier is operative,and idle resources exist at each expenditure round.Autonomous investment spending falls by $10 billion.As a result,the TE curve shifts __________,inventory levels unexpectedly __________,business firms __________ the quantity of goods and services they produce,and Real GDP __________ by __________.

A) downward; rise; decrease; falls; $7.5 billion
B) downward; fall; increase; rises; $40 billion
C) downward; rise; decrease; falls; $40 billion
D) upward; rise; decrease; falls; $40 billion
E) downward; fall; decrease; falls; $7.5 billion