If the value of the government multiplier is 1.5, which of the following is likely to be true if all other variables remain unchanged?
A) A $1 increase in government expenditure reduces gross domestic product by $1.50.
B) A $1.50 increase in government expenditure increases gross domestic product by $1.50.
C) A $1.50 increase in government expenditure reduces gross domestic product by $1.50.
D) A $1 increase in government expenditure increases gross domestic product by $1.50.
D
You might also like to view...
There are 6 firms in a market and the market shares of the firms are 40 percent, 30 percent, 10 percent, 8 percent, 7 percent, and 5 percent. The Herfindahl-Hirschman index is
A) 2738. B) 2664. C) 100. D) 88.
When a resource used in the production of a good sold in a competitive market is available in only limited quantities, the long-run supply curve is likely to be upward sloping
a. True b. False Indicate whether the statement is true or false
All of the following are true regarding the relationship between price elasticity of demand and total revenues EXCEPT
A. when market demand is inelastic, if the market price falls, then total revenues will decrease. B. when market demand is unit elastic, if the market price rises, then total revenues will not change. C. when market demand is elastic, if the market price declines, then total revenues will rise. D. when market demand is inelastic, if the market price rises, then total revenues will decrease.
Refer to the diagram. The multiplier in this economy is:
A. 0E/0A.
B. BD/FG.
C. FG/BD.
D. BD/AD.