The Multiplier Is 5

question 199

Multiple Choice

The multiplier is 5.0 and autonomous expenditure increases by $30 billion. If potential real GDP is unaffected, in the long run, equilibrium real GDP will

• A) increase by $50 billion.
• B) increase by more than $50 billion.
• C) increase by less than $50 billion.
• D) not change.

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Definitions:

Trial Close

A technique used in sales to gauge a potential customer's interest or likelihood of making a purchase before the deal is finalized.

High-involvement

A term referring to situations or purchase decisions where the consumer spends a lot of time and effort considering and making the decision due to the significance of the outcome.

Routine Decision Making

The process of being in the habit of buying a particular product so attitudes and beliefs toward the product are already formed and are usually positive.

Unconscious Need

A desire or requirement of a consumer that they are not fully aware of, which can influence their purchasing behavior.