If a government increases spending by $100 billion,then one can expect output in the economy to increase by

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Quizplus · Accepted Answer

This is because of the concept of the multiplier effect, which suggests that an initial increase in spending can lead to a larger increase in output as the money flows through the economy, generating additional spending and economic activity. The exact value of the multiplier effect can vary depending on factors such as the type of spending and state of the economy, but it is generally accepted that the increase in output will be more than the initial increase in spending.

If a Government Increases Spending by $100 Billion,then One Can