Which of the following correctly describes the spending multiplier?
a. The initial change in consumption, investment, government spending, or net exports divided by the change in equilibrium GDP.
b. An initial increase in aggregate expenditures divided by the equilibrium GDP.
c. An initial increase in aggregate expenditures divided by the change in equilibrium GDP.
d. The ratio of the change in real GDP to an initial change in any component of aggregate expenditures.
d
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What will be an ideal response?
Refer to Table 14-3. What is the Nash equilibrium in this game?
A) In the Nash equilibrium both Saudi Arabia and Nigeria produce a low output and earn a profit of $100 million and $20 million respectively. B) In the Nash equilibrium Saudi Arabia produces a low output and earns a profit of $80 million and Nigeria produces a high output and earns a profit of $30 million. C) In the Nash equilibrium both Saudi Arabia and Nigeria produce a high output and earn a profit of $60 million and $20 million respectively. D) There is no Nash equilibrium.