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  3. Study Set
    Macroeconomics Australia Study Set 1
  4. Exam
    Exam 12: Aggregate Expenditure Multiplier
  5. Question
    When the Multiplier Is ________, an Autonomous Decrease in Investment
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When the Multiplier Is ________, an Autonomous Decrease in Investment

Question 2

Question 2

Multiple Choice

When the multiplier is ________, an autonomous decrease in investment of $200 billion decreases equilibrium real GDP by $400 billion. When the multiplier is ________, an autonomous decrease in investment of $200 billion decreases equilibrium real GDP by $800 billion.


A) 2.0; 4.0
B) 0.4; 0.2
C) $400 billion; $800 billion
D) 4.0; 8.0
E) 0.2; 0.4

Correct Answer:

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