Equilibrium real GDP is $400 billion, the MPC = 0.9, and there are no income taxes or imports. Investment increases $40 billion. If the price level is constant, after the increase in investment, equilibrium real GDP will be
A) $800 billion.
B) $600 billion.
C) $360 billion.
D) $440 billion.

Question

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The Answer of Equilibrium real GDP is $400 billion, the MPC = 0.9, and there are no income taxes or imports. Investment increases $40 billion. If the price level is constant, after the increase in investment, equilibrium real GDP will be
A) $800 billion.
B) $600 billion.
C) $360 billion.
D) $440 billion.

Equilibrium Real GDP Is $400 Billion, the MPC = 0