Suppose we are working with the simplest possible Keynesian-cross multiplier, but with the permanent-income hypothesis figured in. If k = 0.88,
and j = 0.25, the multiplier of a $1 change in government spending goes from ________ in the short run to ________ in the long run.
A) 8.33, 1.28
B) 1.28, 8.33
C) 8.33, 4.00
D) 1.13, 4.00
E) 4.54, 8.33
B
Economics
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The existence of alternative uses for a resource implies it isn't scarce.
a. true b. false
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Which of the goals pursued by policymakers in an open economy is desirable because can help reduce the volatility of economic activity?
A) exchange-rate stability B) monetary policy independence C) free capital flows D) appreciation of the domestic currency
Economics