Economic profit always exceeds accounting profit

If firms receive an economic forecast predicting future increases in the growth of real GDP, they are likely to respond by

A) increasing their level of investment spending to increase future production capacity. B) decreasing their level of investment spending to decrease current production capacity. C) increasing their level of investment spending to increase current production capacity. D) decreasing their level of investment spending to decrease future production capacity.

In Figure 3-7 above, the multiplier is

A) 2. B) 0.2. C) 5. D) 2.5.