The basic idea behind the multiplier is that an increase in
a. GDP brings about an additional, larger increase in GDP.
b. consumer spending causes a larger increase in investment spending.
c. government spending causes a larger increase in tax revenues.
d. spending will cause an even larger increase in equilibrium GDP.
d
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If a decrease in income leads to an increase in the demand for sardines, then sardines are
A) a necessity. B) an inferior good. C) a normal good. D) a neutral good.
Forward transactions originated in the market for
A) common stock. B) corporate bonds. C) government bonds. D) agricultural and other commodities.
Economic growth would best be represented by a
A. Shift inward of the production possibilities curve. B. Movement from inside the production possibilities curve to a point on the production possibilities curve. C. Movement from the production possibilities curve to a point inside the production possibilities curve. D. Shift outward of the production possibilities curve.
__________ focuses on the actions of individual agents within the economy, like households, workers, and businesses.
Fill in the blank(s) with the appropriate word.