In the Short Run, an Increase in Government Expenditure Will

question 71

Multiple Choice

In the short run, an increase in government expenditure will
I. shift the aggregate demand curve rightward.
II. increase real GDP.
III. increase the government expenditure multiplier.
IV. increase the tax multiplier.

• A) I and II
• B) I and III
• C) I, II and III
• D) III and IV

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Definitions:

Null Hypothesis

A statistical hypothesis that assumes no significant difference or effect, serving as the default position to be tested against an alternative hypothesis.

Alternative Hypothesis

In hypothesis testing, the hypothesis that proposes a difference or relationship exists between two variables, as opposed to the null hypothesis.

Commute By Car

The act of traveling from home to work or another destination using a car.

Employee Commuting

The daily travel of employees between their places of residence and the workplace.