Government spending increases by $80 billion and the equilibrium level of output increases by $320 billion. The government spending multiplier

Name: Government spending increases by $80 billion and the equilibrium level of output increases by $320 billion. The government spending multiplier
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Question

Quizplus · Accepted Answer

The government spending multiplier is calculated as the change in equilibrium output divided by the change in government spending, which is $320 billion / $80 billion = 4.

Government Spending Increases by $80 Billion and the Equilibrium Level