Suppose an Initial Increase in Government Expenditure Increases Output by $50,000

question 96

Multiple Choice

Suppose an initial increase in government expenditure increases output by $50,000. If the economy is producing at its potential, what is the size of the multiplier?

• A) $25,000
• B) $20,000
• C) $12,500
• D) $50,000
• E) $0

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