As a result of an initial increase in investment of $200 billion, real GDP increased by $800 billion. Given this information, the expenditure multiplier equals
A) $800 billion. B) 2. C) 1/4. D) 4. E) 6.
D
You might also like to view...
The table above shows information about the costs and benefits of a steel smelter that pollutes the air of a city
If the marginal external cost is $10 per ton at every quantity of steel produced, the equilibrium quantity when the steel industry is unregulated is ________ tons per week. A) 5 B) 15 C) 20 D) 25
We limit ourselves to two periods in the intertemporal model of the business cycle because
A) we need to concentrate on the two phases of the business cycle. B) we can assume that people can live two periods of, say, 30 years. C) this is all we need to emphasize the intertemporal trade-off. D) we need an even number of periods.
An increase in supply, other things being equal, will cause which of the following to occur?
A) quantity supplied to decrease. B) quantity demanded to increase. C) a rightward shift in the demand curve as the price falls. D) a leftward shift in the demand curves as the price increases.
In the long-run, firms in a monopolistically competitive industry will
a. earn substantial economic profits b. tend to just cover costs, including normal profits c. seek to increase the scale of operations d. seek to reduce the scale of operations