Question 1

Whats defention of terms:
-export multiplier

Accepted Answer

measures the total effect on national income as a result of a change in exports

Question 2

Whats defention of terms:
-government multiplier

Accepted Answer

expresses the amount by which total national income is increased by a one-time increase in government spending

Question 3

Whats defention of terms:
-investment multiplier

Accepted Answer

measures the total effect on national income of an initial increase in investment

Question 4

Whats defention of terms:
-Accelerator

Accepted Answer

The answer of Whats defention of terms:
-Accelerator...

Question 5

Explain how a given increase in spending by government, investors, or foreigners may cause a much larger (multiplied) effect on consumption and GDP.
-Define the government multiplier. Explain how it calculates the total growth of national income that results.

Accepted Answer

The answer of Explain how a given increase in spending...

Question 6

Explain how a given increase in spending by government, investors, or foreigners may cause a much larger (multiplied) effect on consumption and GDP.
-Define the investment multiplier. Explain how it calculates the total growth of national income that results.

Accepted Answer

The answer of Explain how a given increase in spending...

Question 7

Explain how a given increase in spending by government, investors, or foreigners may cause a much larger (multiplied) effect on consumption and GDP.
-Define the import multiplier. Explain how it calculates the total growth of national income that results.

Accepted Answer

The answer of Explain how a given increase in spending...

Question 8

Discuss how the multiplied impact on the economic process may help push the economy up rapidly or help push the economy down rapidly.
-Describe the process of how the multiplier impacts the economy. Explain each step of the process.

Accepted Answer

The answer of Discuss how the multiplied impact on the...

Question 9

Discuss how the multiplied impact on the economic process may help push the economy up rapidly or help push the economy down rapidly.
-Explain how government would use knowledge of multiplier effect to stimulate the economy. Slow down the economy.

Accepted Answer

The answer of Discuss how the multiplied impact on the...

Question 10

List and describe limitations of the multiplier.
-What happens to the multiplier if people do not spend much (or any) of their additions to income? Explain.

Accepted Answer

The answer of List and describe limitations of the multiplier.
-What...

Question 11

List and describe limitations of the multiplier.
-What is the impact on the economy if the government has to borrow money to spend?

Accepted Answer

The answer of List and describe limitations of the multiplier.
-What...

Question 12

Explain how a given increase in aggregate demand or national income may cause a much larger (multiplied) effect on investment.
-Describe what effect changing national income has on investment. Why is the impact on investment larger than the change in income?

Accepted Answer

The answer of Explain how a given increase in aggregate...

Question 13

Explain how a given increase in aggregate demand or national income may cause a much larger (multiplied) effect on investment.
-How does a firm decide how much money to invest in future production?

Accepted Answer

The answer of Explain how a given increase in aggregate...

Question 14

Discuss the impact of the accelerator and how it may push the economy up rapidly or help push the economy down rapidly.
-If businesses are optimistic, how will that affect investment decisions? How will investment decisions impact output?

Accepted Answer

The answer of Discuss the impact of the accelerator and...

Question 15

Discuss the impact of the accelerator and how it may push the economy up rapidly or help push the economy down rapidly.
-If there is a sudden drop in investment, what will happen to other macroeconomic measures of the economy?

Accepted Answer

The answer of Discuss the impact of the accelerator and...

Question 16

List and describe limitations of the accelerator.
-State some of the simplifying assumptions used to develop the multiplier. Explain what happens if the assumptions do not hold.

Accepted Answer

The answer of List and describe limitations of the accelerator.
-State...

Question 17

List and describe limitations of the accelerator.
-Explain how access to financing might impact investment and the accelerator.

Accepted Answer

The answer of List and describe limitations of the accelerator.
-Explain...

Question 18

The multiplier effect

Accepted Answer

The multiplier effect refers to the potential ripple effect of a new injection of spending on overall GDP. This means that additional spending can lead to more production, which in turn leads to more employment and income, which then leads to even more spending and production, and so on. The multiplier effect is a key concept in macroeconomics and is often used to estimate the potential impact of government spending or tax policies on overall economic growth.

Question 19

What is the government multiplier?

Accepted Answer

The government multiplier measures how much total national income is increased by an increase in government spending. It is a measure of the impact of government spending on the economy and is used to determine how much stimulus spending is needed to achieve a desired level of economic growth.

Question 20

Assume that government spending increases by $1 billion and national income increases by $10 billion. What is the government multiplier?

Accepted Answer

The government multiplier is calculated as the ratio of the change in national income to the change in government spending. Here, a $1 billion increase in government spending led to a $10 billion increase in national income, so the multiplier is $10 billion / $1 billion = 10.

Quiz 44: The Multiplier

Whats defention of terms: -export multiplier

Whats defention of terms: -government multiplier

Whats defention of terms: -investment multiplier

Whats defention of terms: -Accelerator

Explain how a given increase in spending by government, investors, or foreigners may cause a much larger (multiplied) effect on consumption and GDP. -Define the government multiplier. Explain how it calculates the total growth of national income that results.

Explain how a given increase in spending by government, investors, or foreigners may cause a much larger (multiplied) effect on consumption and GDP. -Define the investment multiplier. Explain how it calculates the total growth of national income that results.

Explain how a given increase in spending by government, investors, or foreigners may cause a much larger (multiplied) effect on consumption and GDP. -Define the import multiplier. Explain how it calculates the total growth of national income that results.

Discuss how the multiplied impact on the economic process may help push the economy up rapidly or help push the economy down rapidly. -Describe the process of how the multiplier impacts the economy. Explain each step of the process.

Discuss how the multiplied impact on the economic process may help push the economy up rapidly or help push the economy down rapidly. -Explain how government would use knowledge of multiplier effect to stimulate the economy. Slow down the economy.

List and describe limitations of the multiplier. -What happens to the multiplier if people do not spend much (or any) of their additions to income? Explain.

List and describe limitations of the multiplier. -What is the impact on the economy if the government has to borrow money to spend?

Explain how a given increase in aggregate demand or national income may cause a much larger (multiplied) effect on investment. -Describe what effect changing national income has on investment. Why is the impact on investment larger than the change in income?

Explain how a given increase in aggregate demand or national income may cause a much larger (multiplied) effect on investment. -How does a firm decide how much money to invest in future production?

Discuss the impact of the accelerator and how it may push the economy up rapidly or help push the economy down rapidly. -If businesses are optimistic, how will that affect investment decisions? How will investment decisions impact output?

Discuss the impact of the accelerator and how it may push the economy up rapidly or help push the economy down rapidly. -If there is a sudden drop in investment, what will happen to other macroeconomic measures of the economy?

List and describe limitations of the accelerator. -State some of the simplifying assumptions used to develop the multiplier. Explain what happens if the assumptions do not hold.

List and describe limitations of the accelerator. -Explain how access to financing might impact investment and the accelerator.

The multiplier effect

What is the government multiplier?

Assume that government spending increases by $1 billion and national income increases by $10 billion. What is the government multiplier?