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

question 169

Multiple Choice

Suppose an initial increase in government expenditure increases output by $50,000. If the size of the multiplier is 2.5, the size of the initial increase in government expenditure was _____

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

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Definitions:

Ventricles

Cavities within the brain that produce and contain cerebrospinal fluid, important for protecting and nourishing the brain.

Meninges

The three layers of protective tissue called the dura mater, arachnoid mater, and pia mater that encase the brain and spinal cord.

Myelin Sheaths

Protective coverings around nerve fibers that facilitate the rapid transmission of neural signals.

Synaptic Vesicles

Small sacs within a neuron that store neurotransmitters, which are chemicals released to communicate with adjoining neurons at a synapse.