Solved

If the Government Purchases Multiplier Is 4 and a Change

Question 61

Multiple Choice

If the government purchases multiplier is 4 and a change in government spending leads to a $500 million decrease in aggregate demand,we can conclude that


A) Government spending decreased by $125 million.
B) Taxes increased by $500 million.
C) Taxes decreased by $100 million.
D) Government spending decreased by $100 million.

Correct Answer:

verifed

Verified

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

Related Questions

Q56: Fiscal policy involves changes in government spending

Q57: Fiscal policy affects<br>A)The level of output only.<br>B)The

Q58: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB5720/.jpg" alt=" Assuming Q<sub>F </sub>is

Q59: Which of the following fiscal policies cause

Q60: A $500 increase in government spending contains

Q62: Payments to individuals for which no current

Q63: The AD shortfall is the amount of

Q64: If the desired fiscal restraint is $80

Q65: If the MPC equals 0.75,$100 billion tax

Q66: Which of the following is an income