Suppose That an Increase in Government Purchases of $100 Million

question 159

Multiple Choice

Suppose that an increase in government purchases of $100 million caused the aggregate demand curve to shift to the right by $350 million at each price level. What is the value of the multiplier?

• A) 2.5
• B) 3.5
• C) 0.285
• D) $250 million

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Definitions:

Negative Inequities

Situations in which individuals perceive that they are receiving less than what they believe to be fair in exchange for their contributions or effort, leading to feelings of dissatisfaction.

Equity Comparisons

Involves assessing fairness in treatment, compensation, and opportunities among employees or entities to ensure justice and motivation.

Monetary Incentives

Financial rewards offered to employees or individuals to motivate performance and achieve specific outcomes.

Perceived Inequity

The feeling of unfairness experienced when an individual believes the rewards received are not proportional to their efforts or contributions.