Suppose That Government Spending Fell by $20 Billion with a Multiplier

question 162

Short Answer

Suppose that government spending fell by $20 billion with a multiplier of 7.What happened to GDP?

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Definitions:

Exports

are goods or services produced in one country and sold to buyers in another, representing a key component of international trade.

Net Exports

Net exports represent the difference between a country's exports and imports of goods and services.

GDP

Describing the entire market price of all final products and services created within the confines of a country throughout a given timeframe as Gross Domestic Product.

Government Spending

Expenditures by government bodies on goods, services, and public projects to fulfill its various functions and responsibilities.