Ignoring any supply-side effects,to close a recessionary gap of $100 billion with a government expenditure multiplier of 5,the government could

Question

Quizplus · Accepted Answer

The government expenditure multiplier of 5 means that every dollar spent by the government increases the total economic output by 5 dollars. To close a $100 billion gap, the government needs to increase spending by $20 billion, as $20 billion x 5 = $100 billion.

Ignoring Any Supply-Side Effects,to Close a Recessionary Gap of $100