The expenditure multiplier arises because one person's additional expenditure becomes another person's additional income that will generate additional 

A. cyclical unemployment.
B. menu costs.
C. expenditure.
D. investment demand.


Answer: C

Economics

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In the aggregate expenditures model, if an economy operates below equilibrium GDP, there will be:

a. unplanned inventory depletion. b. unplanned inventory accumulated. c. a decrease in GDP. d. a decrease in employment.

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The change in saving divided by the change in income is the

a. ratio of saving to income b. same as saving divided by income c. average propensity to save d. marginal propensity to consume e. marginal propensity to save

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Between 2011 and 2022, productivity growth is expected to account for about ________ percent of the growth of real GDP in the United States

A. 23 B. 40 C. 75 D. 92

Economics