Some economists argue that the spending multiplier is actually less than 1.If the spending multiplier is 0.8,then a $200 billion increase in government spending will increase GDP by
A) $200 billion.
B) $160 billion.
C) $40 billion.
D) $250 billion.

Question

Quizplus · Accepted Answer

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

Some Economists Argue That the Spending Multiplier Is Actually Less