Calculate the Government Spending Multiplier If, an Increase in Government

question 44

Multiple Choice

Calculate the government spending multiplier if, an increase in government spending by $5 million increases real GDP by $25 million.

• A)0.2
• B)0.5
• C)2
• D)5
• E)6

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Definitions:

Globalization

Globalization is the process of increased interconnectedness and interdependence of the world's economies, cultures, and populations, facilitated by trade, investment, and information technology.

International Job Mobility

The ability of workers to move across national borders to find employment, often influenced by global economic conditions and immigration policies.

Government Regulations

The laws and rules established by governments to control or direct the behavior of businesses, individuals, and other entities.

Formal Labor Relations

Refers to structured and legally governed interactions between employers, employees, and their representatives.