Solved

The Government Increases Spending by €10 Billion During a Time

Question 24

Multiple Choice

The government increases spending by €10 billion during a time of economic slowdown when output is less than full employment output. The marginal propensity to withdraw is 0.9. What is the value of the multiplier?


A) 0.1
B) 0.9
C) 1.1
D) 10

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q19: The slope of the expenditure line is

Q20: Which of the following will not weaken

Q21: An increase in the demand for money

Q22: Which of the following statements about Keynesian

Q23: Suppose that the government increases expenditures by

Q25: Explain the principle of general equilibrium.

Q26: Which of the following statements about the

Q27: In the IS-MP model, the MP curve

Q28: A deflationary gap occurs because<br>A) Governments set

Q29: Figure 4 <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB7553/.jpg" alt="Figure 4