A reason the government expenditure multiplier is larger than 1 is because
a) investment increases when government expenditure increases
b) government expenditure always increases
c) government expenditure changes generate changes in consumption expenditure
d) taxes are left unchanged
c) government expenditure changes generate changes in consumption expenditure
You might also like to view...
The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B B. recessionary; C C. recessionary; A D. expansionary; A
The monopolist's supply curve
A) doesn't exist. B) is the region of its marginal cost curve above average cost. C) is identical to the demand curve. D) is the region of its marginal cost curve that lies above the marginal revenue curve.
The quantity of gasoline demanded will respond more to a change in price over three weeks than over three years
a. True b. False Indicate whether the statement is true or false
Unplanned inventory depletion is a warning sign of
A. Impending inflation. B. Both a recessionary gap and cyclical unemployment. C. A recessionary gap. D. Cyclical unemployment.