The following information is for a closed economy:

-Refer to the above information.The introduction of $80 billion of government spending has:
A) lowered the multiplier from 2.5 to 2.0.
B) increased the multiplier from 2.5 to 3.0.
C) increased the multiplier from 2.0 to 2.5.
D) had no effect on the size of the multiplier.

Question

The following information is for a closed economy:
 
-Refer to the above information.The introduction of $80 billion of government spending has:
A) lowered the multiplier from 2.5 to 2.0. 
B) increased the multiplier from 2.5 to 3.0. 
C) increased the multiplier from 2.0 to 2.5. 
D) had no effect on the size of the multiplier.

Quizplus · Accepted Answer

The Answer of The following information is for a closed economy:
 
-Refer to the above information.The introduction of $80 billion of government spending has:
A) lowered the multiplier from 2.5 to 2.0. 
B) increased the multiplier from 2.5 to 3.0. 
C) increased the multiplier from 2.0 to 2.5. 
D) had no effect on the size of the multiplier.

The Following Information Is for a Closed Economy