Suppose There Is a $200 Billion Increase in Government Spending

question 279

Multiple Choice

Suppose there is a $200 billion increase in government spending. We know that this increase in government spending will cause which of the following to occur?

• A)an increase in equilibrium real GDP and an increase in the multiplier.
• B)an increase in equilibrium real GDP and a reduction in the multiplier.
• C)an increase in equilibrium real GDP and no change in the multiplier.
• D)equilibrium real GDP will increase by exactly $200 billion.

Understand how a per unit tax affects the pricing decisions of a monopolist in comparison to a competitive market.

Understand the concept of profit maximization and how it is determined by the equality of marginal cost and marginal revenue in monopolistic firms.

Analyze the impact of market structures on pricing and output decisions, including the differences between monopolies and competitive markets in terms of equilibrium price and quantity.

Understand the relationship between demand curves, marginal revenue, and marginal cost in the context of monopoly.

---

Definitions:

Dinner

A main meal of the day, typically eaten in the evening.

Sleep cycle

A period of sleep composed of multiple stages, including REM and non-REM stages, that repeats several times throughout a night's sleep.

NREM Stage

Non-Rapid Eye Movement sleep stage, which consists of three stages of sleep that precede REM sleep, characterized by slower brainwaves and physical relaxation.

REM

Rapid Eye Movement, a phase of sleep characterized by fast and random movement of the eyes, associated with dreaming.