chap 12 - 1(Advancedanalysis)AssumethattheMPCis....

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1.   (Advanced analysis) Assume that the MPC is .8 in an economy that has an aggregate supply curve with a  slope of 1. Also, suppose that the price level is flexible downward. A decrease in investment spending of $10  billion will shift the aggregate demand curve leftward by:    Student Response Value Correct Answer Feedback A. $50 billion and  decrease real GDP  by $50 billion.      B. $50 billion and  decrease real GDP  by $25 billion. 100%       C.  $10 billion and  decrease real GDP  by $10 billion.      D.  $10 billion and  decrease real GDP  by $25 billion.       Score: 1/1    2.   Menu costs:    Score: 0/1   
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  In the immediate short run, both input and output prices are fixed.    Score: 0/1    4.   Which of the following is a  true  statement?    Score: 1/1    5.  
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chap 12 - 1(Advancedanalysis)AssumethattheMPCis....

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