Refer to Figure 12-4.Potential GDP equals $100 billion. The ...

[rachel9]

Question 1

Figure 12-3










Refer to Figure 12-3.  Suppose that government spending increases, shifting up the aggregate expenditure line. GDP increases from GDP
₁ to GDP
₂, and this amount is $200 billion. If the MPC is 0.8, then what is the distance between N and L or by how much did government spending change?

◦ $16 billion
◦ $40 billion
◦ $200 billion
◦ $1,000 billion

Question 2

Figure 12-4










Refer to Figure 12-4.  Potential GDP equals $100 billion. The economy is currently producing GDP
₁ which is equal to $90 billion. If the MPC is 0.8, then how much must autonomous spending change for the economy to move to potential GDP?

◦ -$18 billion
◦ -$2 billion
◦ $2 billion
◦ $18 billion

[josephsuarez]

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[吴鸿伟]

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