Author Question: During the late 1960s, U.S. defense spending increased as the United States fought in Vietnam. This ... (Read 125 times)

CQXA · **on:** Jun 29, 2018

During the late 1960s, U.S. defense spending increased as the United States fought in Vietnam. This increase in government expenditure on goods and services most likely created

A) an inflationary ga

Question 2

The expenditure multiplier is larger than one because

A) an increase in autonomous expenditure induces further increases in aggregate expenditure.
B) an increase in autonomous expenditure brings about a reduction in the real interest rate.
C) additional expenditure induces lower incomes.
D) an increase in autonomous expenditure induces further decreases in aggregate expenditure.
E) the price level rises, thereby reinforcing the initial effect.