Suppose That the Government Spending Multiplier Is 2

question 25

Multiple Choice

Suppose that the government spending multiplier is 2.7 and the tax multiplier is 3.8.This means that,if prices are constant,a $400 billion rise in government spending will __________________,and a $400 billion cut in taxes will _____________________.

• A) raise Real GDP by $1,080 billion; raise Real GDP by $1,520 billion
• B) lower Real GDP by $1,080 billion; lower Real GDP by $1,520 billion
• C) raise Real GDP by $148 billion; raise Real GDP by $105 billion
• D) lower Real GDP by $148 billion; lower Real GDP by $105 billion

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Definitions:

Terrestrial

Pertaining to land or earth, describing organisms that live and thrive on solid ground, as opposed to aquatic or aerial environments.

Plantae

A kingdom comprising all plants, characterized by being multicellular, eukaryotic, and photosynthetic.

Phylogenetic Systematics

A method of classifying organisms based on their evolutionary history and relationships, using phylogenetic trees.

Cladograms

A diagram used in cladistics which shows relations among organisms.