In the Short Run,the Impact of a $50 Billion Spending

question 11

Multiple Choice

In the short run,the impact of a $50 billion spending package on GDP will be

• A) greater than $50 billion because of the multiplier effect
• B) less than $50 billion because of the tax code
• C) greater than $50 billion because of the tax code
• D) exactly $50 billion
• E) greater than $50 billion because of crowding out.

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Definitions:

Market Return

The total gain or loss experienced by investors from holding a market portfolio over a specific period.

Contractual Commitments

Agreements that are documented in a contract requiring a party to do or not do certain things.

Bond Cash Flows

The series of cash payments to the bondholder throughout the life of the bond, typically consisting of periodic interest payments and the return of principal at maturity.

Syndication

The process of selling shares or interests in a venture to multiple individuals or entities to raise capital.