Multiple Choice
Suppose that the multiplier is 4, autonomous investment rises by $50 billion, and autonomous consumption falls by $50 billion at the same time.What will be the effect on equilibrium GDP?
A) Equilibrium GDP demanded will decrease by $200 billion.
B) Equilibrium GDP demanded will be the same, but the type of goods produced will be different.
C) Equilibrium GDP demanded will increase by $200 billion.
D) Equilibrium GDP demanded will increase by $400 billion.
Correct Answer:

Verified
Correct Answer:
Verified
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