If an Increase in Investment Spending of $20 Million Results

question 207

Multiple Choice

If an increase in investment spending of $20 million results in a $200 million increase in equilibrium real GDP, then

• A)the multiplier is 0.1.
• B)the multiplier is 1.
• C)the multiplier is 10.
• D)the multiplier is 100.
• E)the multiplier is 180.

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Definitions:

Cost of Goods Manufactured

The total cost incurred to produce products that were completed during a specific accounting period.

Raw Materials Inventory

The total cost of all the materials that are used in making a product that is still in stock and not yet processed.

Direct Materials

Raw materials that are directly traceable to the production of a product and are a part of the final product.

Total Manufacturing Cost

The aggregate sum of all costs directly involved in the production of goods, including raw materials, labor, and manufacturing overhead.