Suppose the Government Embarks on an Infrastructure Program,spending $8 Billion

question 91

Multiple Choice

Suppose the government embarks on an infrastructure program,spending $8 billion on the construction of new roads and bridges.What is the size of the multiplier if the AS curve is vertical?

• A)0
• B)greater than 1
• C)less than 1
• D)infinity
• E)insufficient information to solve

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Definitions:

Long Run

A period of time in which all factors of production and costs are variable, allowing companies to adjust to market conditions.

Entrepreneurship

The process of designing, launching, and running a new business, often characterized by innovation and risk-taking.

Entrepreneurial Discovery

The process by which entrepreneurs identify new business opportunities and insights, leading to the creation or innovation of products or services.

Economic Growth

An increase in the capacity of an economy to produce goods and services, compared from one period of time to another.