If the spending multiplier equals 5 and equilibrium income is $2 billion below potential GDP, then _____ to reach the potential real GDP level

a. total spending needs to increase by $0.1 billion
b. nominal GDP needs to increase by $1.2 billion
c. total spending needs to decrease by $6 billion
d. nominal GDP needs to decrease by $12 billion
e. total spending needs to increase by $0.4 billion


e

Economics

You might also like to view...

If this is a closed economy how many cars will be exchanged? 

A. 80,000 B. 20,000 C. 60,000 D. 40,000

Economics

What is the 4-firm concentration ratio of an industry with 25 firms each having an equal market share?

a. .16. b. .24. c. .20. d. .12.

Economics

Average product curve tells us:

A. the level of inputs that are the most productive. B. the cost-minimizing level of inputs to hire. C. the profit-maximizing level of inputs to hire. D. All of these are true.

Economics

The firm becomes the dominant organization type whenever

a. markets exist b. markets don't exist c. the net value of centralized, organized production exceeds the net value of market-arranged production d. the net value of market-arranged production exceeds the net value of centralized, organized production e. private enterprise eliminates shirking

Economics