multipler to be Mgov1.2s. The curren OP is $15.18 trillion and the government is planning to increase spending by n (all in one year), the percentage Increase in GDP using the multipler estimate of the

multipler to be Mgov1.2s. The curren OP is $15.18 trillion and the government is planning to increase spending by n (all in one year), the percentage Increase in GDP using the multipler estimate of the

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

An economists estimate the govermment expenditure multipller to be Mgov-1.25. The current
value of GDP is $15.18 trillion and the government is planning to increase spending by
$800 billion (all in one year), the percentage increase in GDP using the multipler estimate of the
economist is:
6.59%
O 4.25%
5.75%
3.16%

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