Suppose consumer confidence declines and as a result, consumer spending decreases by $4 billion dollars
Other things equal, if households spend $0.75 of each extra dollar of income and save the remaining $0.25, by how much will spending decrease during the third round through the circular flow?
A) $1 billion
B) $2.25 billion
C) $3 billion
D) $4 billion
B
Economics
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The formula for the government spending multiplier is
A) (1 + b) / (1 - b). B) -b / (1 - b). C) 1 / (1 - b). D) b / (1 - b).
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The part of the balance of payments account that lists all payments related to the buying and selling of assets is called the:
A. financial and capital account. B. current account. C. government financial account. D. balance of trade.
Economics