Author Question: If the government purchases multiplier equals 2, and real GDP is 14 trillion with potential real GDP ... (Read 113 times)

rlane42 · **on:** Jun 29, 2018

If the government purchases multiplier equals 2, and real GDP is 14 trillion with potential real GDP 14.5 trillion, then government purchases would need to increase by ________ to restore the economy to potential real GDP.

A) 7.25 trillion B) 1 trillion C) 500 billion D) 250 billion

Question 2

Refer to Table 9-17. Looking at the table above, real average hourly earnings between 2015 and 2016 changed by

A) 1.2. B) 4.5. C) 9.9. D) 14.5.