A $1 million increase in investment spending will raise equilibrium output (real GDP) by:
a. less than $1 million.
b. exactly $1 million.
c. between $0.5 and $1.5 million.
d. more than $1 million.
d
You might also like to view...
Suppose the government decided to ease monetary policy, then increase taxes. In the short run in the Keynesian model, the effect of these policies would be to ________ the real interest rate and ________ the level of output
A) lower; increase B) lower; decrease C) lower; have an ambiguous effect on D) have an ambiguous effect on; increase
What was(were) the effect(s) of the Enron Bankruptcy in late 2001 and other corporate scandals in 2002?
A) An ensuing lack of confidence in financial accounting. B) The value of corporate bonds declined. C) It became more expensive for firms to finance their investments. D) all of the above E) none of the above