The Multiplier Is 2

question 134

Multiple Choice

The multiplier is 2.5 and the SAS curve is upward sloping. Investment increases by $20 billion. In the short run, equilibrium real GDP will

• A) increase by $50 billion.
• B) increase by less than $50 billion.
• C) decrease by $50 billion.
• D) decrease by less than $50 billion.

---

Definitions:

Net Income

The total revenue of a company minus all expenses and taxes; a measure of the company's profitability over a specific time period.

Liabilities

Financial obligations or debts that a company owes to others, reflected on the balance sheet.

Statement of Income

A financial document that provides a summary of a company's revenues, expenses, and net income over a specific period.