Question

Suppose that firms become more optimistic about future economic conditions and increase investment spending from $215 billion to $245 billion. Assuming no change in the aggregate price level and MPC = 0.5, this will cause a _______. a. $460 billion increase in RGDP, comprised of $230 billion in investment spending plus another $230 billion in induced consumption spending b. $115 billion increase in RGDP, composed of $30 billion in additional investment spending plus $85 billion in induced consumption spending c. $60 billion increase in RGDP, comprised of $30 billion in additional investment spending plus $30 billion in induced consumption spending d. $125 billion increase in RGDP, composed of $100 billion in investment spending plus $25 billion in induced consumption spending

          Suppose that firms become more optimistic about future economic conditions and increase investment spending from $215 billion to $245 billion. Assuming no change in the aggregate price level and MPC = 0.5, this will cause a _______. 

a. $460 billion increase in RGDP, comprised of $230 billion in investment spending plus another $230 billion in induced consumption spending
b. $115 billion increase in RGDP, composed of $30 billion in additional investment spending plus $85 billion in induced consumption spending
c. $60 billion increase in RGDP, comprised of $30 billion in additional investment spending plus $30 billion in induced consumption spending
d. $125 billion increase in RGDP, composed of $100 billion in investment spending plus $25 billion in induced consumption spending

Added by George E.

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