Suppose an initial increase in government expenditure increases output by $50,000 . If the size of the multiplier is 2.5, the size of the initial increase in government expenditure was:
a. $25,000

The world distribution of income has become more equal since 1970 because

A) the distribution of income within most countries has become more equal. B) foreign aid programs from rich nations have increased in size and especially in effectiveness. C) average incomes in poor nations, such as China, have risen faster than average incomes in rich nations, such as the United States. D) None of the above answers are correct.

Explain what decisions and calculations a firm must make when it is considering the purchase of new capital (i.e., making an investment decision)

What will be an ideal response?