If the expenditure multiplier is 2.5 and investment spending increases by $2,000 billion, what will be the change in GDP?
a. $2,000 billion
b. $5,000 billion
c. $571.4 billion
d. $3,500 billion
e. $7,000 billion
B
You might also like to view...
According to interest rate parity, if the interest rate is 1 percent in the European Union and the euro is expected to appreciate 3 percent, the comparable interest rate in the United States will be
A) 4 percent. B) 3 percent. C) 2 percent. D) 1 percent.
Cartels are typically subject to cheating by their members because
A) if the other firms stick to the agreement, a firm can increase its profits by cutting its price. B) barriers to entry do not exist so new entrants will join. C) the U.S. Justice Department will punish any cartel agreement before the cartel has had a chance to operate. D) product differentiation allows the firms in the cartel to cheat.
For Brent, if the marginal utility of sleeping an extra hour, from 8 a.m. to 9 a.m., is negative: a. Brent is better off getting up at 8 a.m. or earlier
b. Brent is better off getting up at 9 a.m. c. Brent's total utility from sleeping must be negative. d. Brent's average utility from every hour he sleeps must be negative.
Below the equilibrium level of nominal interest rates, there is a _______ of money and money interest rates will tend to _____ as a result. a. Shortage; fall. b. Shortage; rise. c. Surplus, fall
d. Surplus; rise.