An economy is at full employment, the price level is 100, and the multiplier is 2. If investment increases by $10 billion, how does real GDP change?
In the short run ________, and in the long run ________.

Question

An economy is at full employment, the price level is 100, and the multiplier is 2. If investment increases by $10 billion, how does real GDP change? 
 In the short run ________, and in the long run ________.

Accepted Answer

real GDP increases by less than $20 billion; real GDP does not change

Answer

real GDP does not change; real GDP increases by less than $20 billion

Answer

real GDP increases by less than $20 billion; real GDP increases by at least $20 billion

Answer

real GDP increases by more than $20 billion; real GDP does not change

Answer

real GDP does not change; real GDP does not change

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An economy is at full employment, the price level is 100, and the multiplier is ...

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