If the Expenditure Multiplier Is 2

question 208

Multiple Choice

If the expenditure multiplier is 2.5 and investment spending increases by $2,000 billion,what will be the change in GDP?

• A) $2,000 billion
• B) $5,000 billion
• C) $571.4 billion
• D) $3,500 billion
• E) $7,000 billion

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Definitions:

Unearned Sales Revenues

A liability on a company's balance sheet that represents revenue received before the company has delivered goods or services.

Sales Revenues

Sales revenues refer to the income generated from the sale of goods or services by a company before any expenses are subtracted, indicating the primary source of business income.

Operating Expenses

Costs related to the day-to-day functions of a business, excluding cost of goods sold, but including items like rent, salaries, utilities, and depreciation.

Accrued Liabilities

Accrued liabilities refer to expenses that have been incurred but not yet paid for, recognized on the balance sheet.