Suppose the economy's multiplier is 2. Other things equal, a $25 billion decrease in government expenditures on
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Question:
Suppose the economy's multiplier is 2. Other things equal, a $25 billion decrease in government expenditures on national defense will cause equilibrium GDP to
Multiple Choice
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decrease by $50 billion.
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remain unchanged since spending on military goods is unproductive and usually wasteful.
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decrease by $150 billion.
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decrease by $25 billion.
Related Book For
Macroeconomics
ISBN: 978-1319120054
3rd Canadian edition
Authors: Paul Krugman, Robin Wells, Iris Au, Jack Parkinson
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