Ignoring Any Supply-Side Effects, to Close an Inflationary Gap of $100

question 200

Multiple Choice

Ignoring any supply-side effects, to close an inflationary gap of $100 billion with a government expenditure multiplier of 5, the government could

• A) decrease government expenditure on goods and services by $100 billion
• B) decrease government expenditure on goods and services by $20 billion.
• C) lower taxes by $100 billion.
• D) lower taxes by more than $20 billion.
• E) increase government expenditure on goods and services by $20 billion.

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Definitions:

Electric Arc

A visible plasma discharge caused by electrical current passing through air, used in welding and other industrial processes.

Oxyacetylene Torch

A tool that mixes oxygen and acetylene gases to create a high-temperature flame for welding or cutting.

Fuel Valve

A component in fuel systems that controls the flow or direction of fuel, ensuring proper delivery to an engine's combustion chamber.

Acetylene Regulator

A device used to control the pressure and flow of acetylene gas from a tank to an output, commonly used in welding.