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Author Question: Assume there is no government or foreign sector. If the multiplier is 5, a $4 billion increase in ... (Read 2498 times)

RODY.ELKHALIL

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Question 1

Assume there is no government or foreign sector. If the 
MPS is 0.10, a $20 billion decrease in planned investment will cause aggregate output to decrease by


◦ $20 billion.
◦ $50 billion.
◦ $100 billion.
◦ $200 billion.

Question 2

Assume there is no government or foreign sector. If the multiplier is 5, a $4 billion increase in investment will cause aggregate output to increase by


◦ $125 billion.
◦ $80 billion.
◦ $50 billion.
◦ $20 billion.


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Marked as best answer by RODY.ELKHALIL on Apr 19, 2019

emily12345

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