When the Multiplier Is _{--------------------} , an Autonomous Decrease in Investment

question 14

Multiple Choice

When the multiplier is _{--------------------} , an autonomous decrease in investment of $200 billion decreases equilibrium real GDP by $400 billion. When the multiplier is _{--------------------} , an autonomous decrease in
Investment of $200 billion decreases equilibrium real GDP by $800 billion.

• A)0.4; 0.2
• B)2.0; 4.0
• C)4.0; 8.0
• D)$400 billion; $800 billion
• E)0.2; 0.4

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Definitions:

Accrued Loss

Refers to a loss that has occurred but has not yet been recorded in the accounting records through the date of the financial statements.

Purchase Commitments

Agreements to buy goods or services at a predetermined price, often specifying quantity and delivery dates.

Gross Profit Method

This is an accounting technique used to estimate inventory value, calculating gross margin as a percentage of sales to find the cost of goods sold and ending inventory.