Suppose the Government Embarks on an Infrastructure Program,spending $8 Billion

question 91

Multiple Choice

Suppose the government embarks on an infrastructure program,spending $8 billion on the construction of new roads and bridges.What is the size of the multiplier if the AS curve is vertical?

• A)0
• B)greater than 1
• C)less than 1
• D)infinity
• E)insufficient information to solve

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Definitions:

Positive Correlation

The incidence of one event increases when the second one increases.

Occurrence of Events

The happening or taking place of incidents or actions, often considered in terms of their frequency or significance.

Analogies

A form of reasoning or argumentation in which similarities between two different things are drawn to explain or clarify a concept.

Refute Arguments

The process of logically disproving or countering the claims or premises of an argument.