The multiplier tells us the relationship between
A. the exchange rate and the level of imports.
B. the interest rate and the level of investment expenditure.
C. a change in autonomous spending and the resulting change in equilibrium real GDP.
D. the exchange rate and the level of exports.
Answer: C
You might also like to view...
Answer the following statements true (T) or false (F)
1) The production of durable goods is more stable than the production of nondurables over the business cycle. 2) The business cycle is so named because upswings and downswings in business activity are predictably equal in terms of duration and intensity. 3) People who work part time, but desire to work full time, are considered to be officially unemployed. 4) The natural rate of unemployment in the United States today is about 5 to 6 percent. 5) An annual rate of inflation of 7 percent will double the price level in about 15 years.
The consumer price index overestimates inflation because it
A. allows consumers to move along a given indifference curve from one year to the next. B. uses the second year's market basket as the base rather than the first year's basket. C. measures the cost of a market basket in the second year that has too many units of the most inflated items. D. compares prices of what consumers actually buy rather than a fixed basket of goods.