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Loraine Loraine
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8 years ago
Ignoring any supply-side effects, to close a recessionary gap of $100 billion with a government expenditure multiplier of 5, the government could
A) increase government expenditure on goods and services by $100 billion.
B) increase government expenditure on goods and services by $20 billion.
C) raise taxes by $100 billion.
D) raise taxes by more than $20 billion.
E) decrease government expenditure on goods and services by $20 billion.
Textbook 
Essential Foundations of Economics

Essential Foundations of Economics


Edition: 7th
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Start by doing what's necessary; then do what's possible; and suddenly you are doing the impossible.
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SydnieSydnie
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8 years ago
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#2
8 years ago
I was confident with my answer, glad it was correct.

Oh, and thumbs-up are more than welcome Slight Smile
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