Multiple Choice
If the government purchases multiplier equals 2, and real GDP is $14 trillion with potential GDP $14.5 trillion, then government purchases would need to increase by ________ to restore the economy to potential GDP.
A) $7.25 trillion
B) $1 trillion
C) $500 billion
D) $250 billion
Correct Answer:
Verified
Correct Answer:
Verified
Q24: Suppose real GDP is $13 trillion, potential
Q25: Refer to Figure 13.6 for the following
Q26: 'Contractionary fiscal policy' aims to reduce the
Q27: What is the government purchases multiplier if
Q28: Suppose real GDP is $1.3 trillion and
Q30: Refer to Figure 13.2 for the following
Q31: Refer to Figure 13.7 for the following
Q32: Raising taxes will:<br>A)raise disposable income and raise
Q33: If the equilibrium real GDP were higher
Q34: In 2015/2016, the largest share of Australian