Suppose the Multiplier Is 2

question 29

Multiple Choice

Suppose the multiplier is 2.5 and investment increases by $20 billion. Starting at potential GDP, in the long run, equilibrium real GDP

• A)increases by $50 billion.
• B)increases by more than $50 billion.
• C)decreases by less than $50 billion.
• D)does not change.
• E)increases by less than $50 billion.

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Definitions:

Positive Points

Merits or advantages awarded in a system, often used to acknowledge accomplishments or desired behaviors.

Legality

Refers to the state or quality of being in accordance with the law; the adherence to and the observance of legal obligations and standards.

Feedback on Failures

Information provided about unsuccessful outcomes or errors, aimed at learning and improvement purposes.

Displeased Supervisors

Managers or leaders who are not satisfied with the performance or behavior of their subordinates.