Multiple Choice
If the value of the government multiplier is 1.5,which of the following is likely to be true if all other variables remain unchanged?
A) A $1 increase in government expenditure increases GDP by $1.50.
B) A $1 increase in government expenditure reduces GDP by $1.50.
C) A $1.50 increase in government expenditure increases GDP by $1.50.
D) A $1.50 increase in government expenditure reduces GDP by $1.50.
Correct Answer:
Verified
Correct Answer:
Verified
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