Suppose the Government Expenditure Increases by $200 and the Simple

question 132

Multiple Choice

Suppose the government expenditure increases by $200 and the simple spending multiplier equals 5.The final increase in output will be:

• A)$6000.
• B)$500.
• C)$200.
• D)more than $200.
• E)less than $200.

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Definitions:

Contingency Approach

A management theory that suggests the most appropriate form of decision making is contingent upon the internal and external situation.

Situational View

An approach that suggests the effectiveness of management techniques depends on the specific circumstances or situation at hand.

Closed-System Thinking

An approach that views organizations as systems that are relatively independent of environmental influences, focusing instead on internal dynamics and efficiency.

Contingency View

A management theory that suggests the optimal course of action depends on the specific internal and external circumstances faced by an organization.