The basic idea behind the multiplier is that an increase in GDP brings about an additional, larger increase in GDP O Consumer spending causes a larger increase in investment spending O Government spending causes a larger increase in tax revenues O Spending will cause an even larger increase in equilibrium GDP
The basic idea behind the multiplier is that an increase in GDP brings about an additional, larger increase in GDP O Consumer spending causes a larger increase in investment spending O Government spending causes a larger increase in tax revenues O Spending will cause an even larger increase in equilibrium GDP
Chapter19: The Keynesian Model In Action
Section: Chapter Questions
Problem 8SQ
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Transcribed Image Text:The basic idea behind the multiplier is that an increase in
GDP brings about an additional, larger increase in GDP
Consumer spending causes a larger increase in investment spending
Government spending causes a larger increase in tax revenues
O Spending will cause an even larger increase in equilibrium GDP
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