If government spending rises by $62 billion and GDP rises by $110 billion, then the multiplier in the economy is approximately:
A)1.12.
B)1.77.
C)2.77.
D)0.56.

Name: If government spending rises by $62 billion and GDP rises by $110 billion, then the multiplier in the economy is approximately: A)1.12. B)1.77. C)2.77. D)0.56.
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Quizplus · Accepted Answer

The multiplier can be calculated as the change in GDP divided by the change in government spending. Therefore, the multiplier is approximately 110/62 = 1.77.

If Government Spending Rises by $62 Billion and GDP Rises