If an Increase in Investment of $50 Causes an Increase

question 74

Multiple Choice

If an increase in investment of $50 causes an increase in real GDP of $250, the value of the spending multiplier is:

• A) 5.
• B) 0.20.
• C) 0.80.
• D) 10.

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Definitions:

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period detailing revenues, expenses, profits, and losses.

Comparability

The quality that allows users to analyze and recognize similarities and differences between two or more items of financial information.

Operational Results

The financial outcomes resulting from a company's core business operations.