Multiple Choice
Suppose the economy is in equilibrium when business firms decide to increase investment spending by $100 billion.According to the short-run macro model,what would be the effect on equilibrium real GDP?
A) There would be no effect;the increased investment spending would be offset by decreased spending in other sectors.
B) It would increase by $100 billion.
C) It would increase by more than $100 billion.
D) It would increase,but by less than $100 billion.
E) It would decline by $100 billion.
Correct Answer:
Verified
Correct Answer:
Verified
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