The Government-Spending Multiplier Tells Us

question 73

Multiple Choice

The government-spending multiplier tells us:

• A)the amount by which GDP increases when government spending increases by $1.
• B)the amount by which GDP decreases when government increases its spending on capital goods by $1.
• C)the fraction of each dollar that will increase GDP of each dollar spent by the government.
• D)the amount by which government spending increases when GDP increases by $1.

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