Solved

The Following Information Is for a Closed Economy Refer to the Information

Question 101

Multiple Choice

The following information is for a closed economy:  GDP $100200300400500600700 C $100160220280340400460 S$04080120160200240Ig$80808080808080\begin{array}{c}\begin{array}{c}\underline{\text { GDP }} \\\$ 100 \\200 \\300 \\400 \\500 \\600 \\700\end{array}\begin{array}{c}\underline{\text { C }}\\ \$ 100 \\160 \\220 \\280 \\340 \\400 \\460 \end{array}\begin{array}{c}\underline{\text { S}} \\\$ 0 \\40 \\80 \\120 \\160 \\200 \\240 \end{array}\begin{array}{c}I_{g} \\\hline \$ 80 \\80 \\80 \\80 \\80 \\80 \\80 \end{array}\end{array}
Refer to the information.The introduction of $80 billion of government spending would:


A) lower the multiplier from 2.5 to 2.0.
B) increase the multiplier from 2.5 to 3.0.
C) increase the multiplier from 2.0 to 2.5.
D) have no effect on the size of the multiplier.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents