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Suppose the Government Spending Multiplier Is 2

Question 131

Multiple Choice

Suppose the government spending multiplier is 2.The federal government cuts spending by Suppose the government spending multiplier is 2.The federal government cuts spending by What is the change in GDP if the price level is not held constant? A) an increase of less than $8 billion B) an increase equal to $8 billion C) an increase of greater than $8 billion D) a decrease of less than $8 billion E) a decrease of more than $8 billion What is the change in GDP if the price level is not held constant?


A) an increase of less than $8 billion
B) an increase equal to $8 billion
C) an increase of greater than $8 billion
D) a decrease of less than $8 billion
E) a decrease of more than $8 billion

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