Suppose That a $30 Billion Increase in Government Spending Increases

Multiple Choice

Suppose that a $30 billion increase in government spending increases Real GDP by $150 billion,and that a $10 billion tax reduction increases Real GDP by $40 billion.In this situation,the tax multiplier is _______________ the government spending multiplier.

A) less than
B) greater than
C) equal to
D) none of the above