If government expenditure on goods and services increases by $10 billion, then aggregate demand
A) increases by $10 billion.
B) increases by $10 billion multiplied by the government expenditure multiplier.
C) increases by $10 billion multiplied by the tax multiplier.
D) decreases by $10 billion.
E) decreases by $10 billion multiplied by the government expenditure multiplier.
B
Economics
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The marginal propensity to consume is 0.75, marginal propensity to invest is 0.3, and the marginal propensity to import is 0.2. What is the size of the multiplier?
A) 6.67 B) 5.67 C) 4.67 D) 1.67
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If a country has a floating exchange rate, it means their currency:
A. is set by the government. B. can be freely traded and their value is determined by the market. C. has a value determined by the market for loanable funds. D. All of these statements are true.
Economics