Multiple Choice
If the multiplier is 3,a $1 billion decrease in government spending will
A) lower equilibrium GDP by one-third.
B) lower equilibrium GDP by 3.
C) raise equilibrium GDP by one-third.
D) raise equilibrium GDP by 3.
E) leave equilibrium GDP unchanged but change intended spending by one-third.
Correct Answer:
Verified
Correct Answer:
Verified
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