If autonomous investment increases by $200 billion and the marginal propensity to consume (MPC) is 0.5, then
A) real Gross Domestic Product (GDP) will rise by $100 billion.
B) real Gross Domestic Product (GDP) will rise by $200 billion.
C) real Gross Domestic Product (GDP) will rise by $400 billion.
D) real Gross Domestic Product (GDP) will decrease by $100 billion.
C
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The equilibrium level of real GDP is $5,000 billion, the full employment level of real GDP is $6,000 . and the marginal propensity to consume (MPC) is 0.90 . Which of the following statements is true?
a. A recessionary gap exists equal to $100 billion. b. The full employment target could be reached if government increased its spending by $100 billion. c. Both of the above statements are true. d. Neither of the above statements are true.
A mortgage that allows the borrower to choose the monthly payment for a few years is a
A. credit-default swap. B. "liar loan." C. pay-option adjustable-rate mortgage. D. traditional, thirty-year fixed-rate mortgage.