If the multiplier is 4 and the desired increase in real GDP is $200 billion, the initial change in spending required to achieve that goal:
A) is $50 billion.
B) is $800 billion.
C) is $200 billion.
D) cannot be determined.

Question

Quizplus · Accepted Answer

The initial change in spending required is calculated by dividing the desired increase in GDP by the multiplier. So, $200 billion / 4 = $50 billion.

If the Multiplier Is 4 and the Desired Increase in Real