The Multiplier Is 2

question 134

Multiple Choice

The multiplier is 2.5 and the SAS curve is upward sloping. Investment increases by $20 billion. In the short run, equilibrium real GDP will

• A) increase by $50 billion.
• B) increase by less than $50 billion.
• C) decrease by $50 billion.
• D) decrease by less than $50 billion.

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Definitions:

Discharge

The flow rate of water from a given source, such as a river or aquifer, typically measured in volume per unit time.

Low-Gradient Stream

A stream with a gentle slope that typically has slower water velocity and can form wide meanders, floodplains, and deposits of sediments along its course.

Erosion

the process by which natural forces, like water or wind, remove soil, rock, or dissolved material from one location and transport it to another.

Stream Confined

Refers to a watercourse that flows within narrow, limited boundaries, usually within a canyon or a gorge.