If GDP is $5,800 billion, the multiplier is 8, and G falls by $20 billion, find the new level of GDP.
What will be an ideal response?
5,800 + (20 × 8) = 5,800 - 160 = $5,640 billion
You might also like to view...
An increase in total factor productivity shifts the production function
A) upward and increases the marginal product of labor. B) upward and decreases the marginal product of labor. C) downward and increases the marginal product of labor. D) downward and decreases the marginal product of labor.
According to the Taylor rule, if actual output is greater than the natural rate of output, then the Fed should
a. decrease inflation. b. increase interest rates. c. conduct open market sales. d. decrease interest rates. e. Both a and b
A coffee shop sells a small cup of coffee at $3, while a large cup, which is twice as big, at $5. This is an example of
A) first-degree price discrimination. B) second-degree price discrimination. C) third-degree price discrimination. D) actual cost differences.
Which of the following is a disadvantage of the corporation compared to the sole proprietorship?
a. limited liability b. difficulty raising start-up money c. lack of profitability d. corporate income is taxed twice e. corporations are more vulnerable in the case of the death of an owner