Suppose the Multiplier Is 2 and the Short- Run Aggregate

question 83

Multiple Choice

Suppose the multiplier is 2 and the short- run aggregate supply curve is positively sloped.Investment increases by $10 billion.In the short run, equilibrium real GDP

• A)does not change.
• B)increases by less than $20 billion.
• C)increases by more than $20 billion.
• D)decreases by less than $20 billion.
• E)increases by $20 billion.

---

Definitions:

Public-sector Managers

Individuals responsible for directing, controlling, and overseeing the operations and budgets within government departments or public sector organizations.

Economically Efficient

A situation in which resources are allocated in a way that maximizes the net benefit to society, with no way to improve someone's condition without worsening another's.

Public Choice Theory

An economic theory that studies how public decisions and policies are made, considering individuals in the public sector make choices largely based on their own interests, similar to those in the private sector.

Private Sector

The part of the economy that is owned and operated by private individuals and companies, not controlled by the state, focusing on profit generation.