If the Value of the Government Multiplier Is 1

question 129

Multiple Choice

If the value of the government multiplier is 1.5,which of the following is likely to be true if all other variables remain unchanged?

• A) A $1 increase in government expenditure increases GDP by $1.50.
• B) A $1 increase in government expenditure reduces GDP by $1.50.
• C) A $1.50 increase in government expenditure increases GDP by $1.50.
• D) A $1.50 increase in government expenditure reduces GDP by $1.50.

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Definitions:

Polysaccharides

Large, complex carbohydrate molecules composed of many monosaccharide units joined together.

Monosaccharides

Simple sugars that are the most basic form of carbohydrates, such as glucose and fructose, which cannot be hydrolyzed into simpler sugars.

Glucose

An elementary form of sugar critical for energy in living organisms, also making up parts of numerous carbs.

Cholesterol

A waxy, fat-like substance present in all cells of the body, needed to make vitamin D, hormones, and substances that help digest foods.