A Multiplier of 10 Means That a $100 Billion Increase

question 143

Multiple Choice

A multiplier of 10 means that a $100 billion increase in investment will

• A)increase equilibrium real GDP by $100 billion.
• B)decrease equilibrium real GDP by $1000 billion.
• C)increase equilibrium real GDP by $10 billion.
• D)increase equilibrium real GDP by $1000 billion.

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Definitions:

Pumpkins

A type of squash plant producing large, typically orange, edible fruits associated with fall festivities and cooking.

Factors Of Production

The economic resources used in the production of goods and services, including land, labor, capital, and entrepreneurship.

Labor

Labor represents the human effort, both physical and mental, used in the production of goods and services.

Capital

Financial assets or the financial value of assets, such as cash and goods, working to produce further wealth or used in the production of goods and services.