If an increase in investment of $50 causes an increase in real GDP of $250, the value of the spending multiplier is:
A)5.
B).20.
C).80.
D)3.
E)10.

Name: If an increase in investment of $50 causes an increase in real GDP of $250, the value of the spending multiplier is: A)5. B).20. C).80. D)3. E)10.
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Quizplus · Accepted Answer

The spending multiplier is calculated as the change in GDP divided by the change in investment. Here, $250 / $50 = 5.

If an Increase in Investment of $50 Causes an Increase