A Study of Estimated Multipliers in the Major Econometric Models

question 117

Multiple Choice

A study of estimated multipliers in the major econometric models shows that

• A)the government-spending multiplier tends to increase and then later decrease over time.
• B)the monetary multiplier is much larger than the government spending multiplier.
• C)there is quite a bit of variation in the value of the multipliers among the models.
• D)A and C are both correct.

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Definitions:

Cost of Goods Sold

The outlays directly connected to the making of goods a company markets, comprising both material and labor expenses.

Net Income

The remaining income of a company after subtracting all costs and taxes from its total income.

Inventory

A collection of goods or materials a company holds for sale or production.

Consolidated Financial Statements

Financial reports that aggregate the financial position and operating results of a parent company and its subsidiaries.