Figure 10.2 -Refer to Figure 10.2.Assume the Economy Is Initially at Equilibrium

Multiple Choice

Figure 10.2

-Refer to Figure 10.2.Assume the economy is initially at equilibrium at potential GDP of $500 billion.If the MPC = 0.80 ,and real GDP falls to Y₂ = $400 billion,the vertical distance between AE₁ and AE₂ must be

A) $8 billion.
B) $20 billion.
C) $80 billion.
D) $100 billion.