The multiplier can be calculated by dividing:
A. The initial change in spending by the change in real GDP
B. The change in real GDP by the initial change in spending
C. One by one minus the marginal propensity to save
D. One by one minus the marginal propensity to invest
B. The change in real GDP by the initial change in spending
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Refer to the scenario above. Which country has the lowest income per capita in PPP-adjusted dollars?
A) Country 1 B) Country 2 C) Country 3 D) Country 4
A higher interest rate will lead a firm to purchase less capital because the higher interest rate
a. lowers the marginal product of capital goods b. causes technological change to cease c. lowers the present value of capital goods d. causes economies of scale to be exhausted e. causes the capital market become monopolized