Suppose That a $50 Billion Increase in Government Spending Increases

question 72

Multiple Choice

Suppose that a $50 billion increase in government spending increases Real GDP by $260 billion,and that a $50 billion tax reduction increases Real GDP by $290 billion.In this situation,the tax multiplier is _______________ the government spending multiplier.

• A) less than
• B) greater than
• C) equal to
• D) none of the above

---

Definitions:

Temperature

A measure of the thermal energy of a system, indicating how hot or cold the system is.

Pressure

The exertion of force upon a surface by an object, fluid, etc., in contact with it, measured in units such as Pascal (Pa).

Liters

A metric unit of volume equal to one cubic decimeter or 1000 cubic centimeters.