A 1.5 trillion increase in investment leads equilibrium ...

[ENagel]

A 1.5 trillion increase in investment leads equilibrium expenditure to increase from 7.0 trillion to 10.5 trillion. In this case, the expenditure multiplier is
 
  A) 7.00. B) 4.67. C) 2.33. D) 1.50. E) 10.5.

Question 2

Suppose that a currency's value is found to be overvalued by using purchasing power parity. Then
 
  A) the currency will appreciate in the future but we don't know when.
  B) we know when and how much the currency will depreciate.
  C) the interest rate in the country will change in order to restore purchasing power parity.
  D) we know when and how much the currency will appreciate.
  E) the currency will depreciate in the future but we don't know when.

[LP]

Answer to Question 1

C

Answer to Question 2

E

[ENagel]

Correct answers!

[LP]

Great! Please up vote