Multiple Choice
The next questions refer to the following simple Keynesian model.
Suppose C = 1000 + .9Y, G = 400, I = 100, (X - IM) = 0, and there are no income taxes.
-If investment falls by 50,equilibrium GDP will
A) fall by 50
B) fall by 5
C) fall by 500
D) fall by 45
E) fall by half its previous value
Correct Answer:
Verified
Correct Answer:
Verified
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