Which of the following explains why a $100 billion reduction in consumption spending might decrease equilibrium real GDP by more than $100 billion?
A. Say's law.
B. The quantity theory of money.
C. Flexible resource prices.
D. The multiplier principle.
Answer: D
Economics
You might also like to view...
The economic way of thinking assumes people, including Mother Teresa, Jack the Ripper, Henry VIII, and Hilary Rodham Clinton, act on the basis of
A) greed. B) altruism. C) terror. D) the projects they are interested in.
Economics
An increase in the price level shifts the aggregate demand curve to the left
Indicate whether the statement is true or false
Economics