If the MPE Is Equal to

Multiple Choice

If the MPE is equal to .7, the baseline level of spending is $4 trillion, a one percentage point decrease in the real interest rate increases investment spending by $100 billion and exports by $20 billion, and the real interest rate is equal to 5%, then the equilibrium level of real GDP is

A) $11.733 trillion.
B) $5.028 trillion.
C) $1.056 trillion.
D) $14.933 trillion.