Suppose that the economy is at full employment, the price level is 100, and the multiplier is
Question:
Suppose that the economy is at full employment, the price level is 100, and the multiplier is 2. Investment increases by $100 billion.
a. What is the immediate change in the quantity of real GDP demanded?
b. In the short run, does real GDP increase by more than, less than, or the same amount as the immediate change in the quantity of real GDP demanded?
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a The quantity of real GDP demanded increases by 200 billion Th...View the full answer
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Related Book For 
Macroeconomics Canada In The Global Environment
ISBN: 9780321931207
9th Edition
Authors: Michael Parkin, Robin Bade
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