If a $10 billion increase in investment leads to a $20 billion increase in GDP,the multiplier is
A) 0.5.
B) 2.
C) 10.
D) 30.

Multiple Choice

Related questions

Q 9

The series of induced changes in consumption spending that result from an initial change in autonomous expenditure is called the
A) induced effect.
B) autonomous effect.
C) multiplier effect.
D) consumption effect.

Q 11

In a simple model of the economy,if the MPC is 0.8,the multiplier will equal
A) 0.2.
B) 0.8.
C) 1.25.
D) 5.

Q 12

The level of potential GDP
A) increases as the real rate of interest decreases.
B) increases as the real rate of interest increases.
C) is unaffected by the real rate of interest.
D) is represented on the IS-MP model by a horizontal line at the world real rate of interest.