Purchase Solution

Value of the multiplier

Not what you're looking for?

Ask Custom Question

12. During one period in history, business investment spending dropped and our trade deficit got larger (imports were bigger than exports.) A reason this did not lead to a drop in GDP could have been:
A) consumer spending increased
B) government deficits declined
C) imports dropped relative to exports
D) exports dropped relative to imports
E) our exchange rate improved

19. Assume the MPE is .75. If the government raises spending by $100 Billion the equilibrium level of GDP should (assuming Keynesian economics):
A) fall by $ 300 billion
B) rise by $ 300 billion
C) fall by $ 400 billion
D) rise by $ 400 billion

20. In a period of high unemployment the Fed. would probably:
A) raise the fed funds rate
B) raise the discount rate
C) raise the required reserve ratio
D) buy bonds through open market operations
E) increase government spending and cut taxes

Attachments
Purchase this Solution

Solution Summary

Value of the multiplier is determined.

Solution Preview

12 During one period in history, business investment spending dropped and our trade deficit got larger (imports were bigger than exports.) A reason this did not lead to a drop in GDP could have been:

A) consumer spending increased
(Which has make up the decline in ...

Purchase this Solution


Free BrainMass Quizzes
Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.