If Short-Run Equilibrium Output Equals 10,000, the Income-Expenditure Multiplier Equals

question 66

Multiple Choice

If short-run equilibrium output equals 10,000, the income-expenditure multiplier equals 5, potential output (Y*) equals 11,000, then government purchases must ________ to eliminate any output gap.

• A)increase by 200
• B)increase by 1,000
• C)increase by 5,000
• D)decrease by 200

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Definitions:

Control Group

In an experiment, the group that does not receive the treatment or intervention being tested, serving as a baseline for comparing the effects of the treatment on the experimental group.

Study Habits

Study habits are the behaviors and strategies that individuals adopt to learn and retain information effectively, influencing their academic performance.

Internal Validity

The degree to which the results of a study are due to the independent variable, rather than other factors.

One-group Pretest-posttest Design

An experimental design where a single group of participants is measured before and after an intervention, lacking a control group for comparison.