Suppose the Multiplier Is 2

question 34

Multiple Choice

Suppose the multiplier is 2.5 and investment increases by $20 billion.Starting at potential GDP, in the long run, equilibrium real GDP

• A)increases by $50 billion.
• B)increases by more than $50 billion.
• C)decreases by less than $50 billion.
• D)increases by an amount greater than zero but less than $50 billion.
• E)does not change.

---

Definitions:

Tender Delivery

The process of formally presenting goods or documents to a designated party, often in fulfillment of a contractual obligation.

Consequential Damage

Indirect losses that occur as a result of a breach of contract or other wrongful act, beyond the immediate damage or loss incurred.

Cash Payment

A transaction where the payment for goods or services is made using physical currency or through an immediate electronic transfer of funds.

Grand Opening Sale

A promotional event conducted to attract customers to a new business or service, offering products at reduced prices for a limited time to generate interest and traffic.