If the spending multiplier is 1.2,then a $100 billion increase in government spending will increase GDP by
A) $100 billion.
B) $120 billion.
C) $83.3 billion.
D) $20 billion.

Name: If the spending multiplier is 1.2,then a $100 billion increase in government spending will increase GDP by A) $100 billion. B) $120 billion. C) $83.3 billion. D) $20 billion.
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Question

Quizplus · Accepted Answer

The spending multiplier tells us how much GDP will increase for every $1 increase in government spending.

If the Spending Multiplier Is 1