If government spending increased by 100 billion and the MPS within the economy was 0.25, what would be the total impact on real GDP?
a. 25 billion increase
b. 75 billion increase
c. 133 billion increase
d. 400 billion increase
Question 2
Identify the correct definition of liquidity.
a. The availability of credit in the form of money is known as liquidity.
b. The ability of money to be a store of value is known as liquidity.
c. The difference between real and nominal money values is known as liquidity.
d. The ability of an asset to be easily converted into money is known as liquidity.
e. The ability of an asset to be universally accepted as a means of exchange is known as liquidity.
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Government By the People, 2016 Presidential Election, 26th Edition