Assume that initially G is $100 and equilibrium real GDP demanded is $1,000.If the multiplier is 4 and G increases to $200,real GDP demanded will increase
A) by $100
B) by $2,000
C) by $1,000
D) to $1,400
E) to $2,000
Correct Answer:
Verified
Q2: Exhibit 11-5 Q3: Government purchases are assumed to be autonomous Q5: If the government increases its purchases by Q6: Which of the following assumptions is usually Q7: If the MPC = 0.6 and government Q8: When government purchases increase,the spending multiplier tells Q9: If the MPC equals 0.75 and G Q10: If government expenditures or taxes are assumed Q11: Exhibit 11-5 Q139: Equal increases in government purchases and in
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents