If an increase of $10 billion of investment results in an increase in equilibrium expenditure of $40 billion, the expenditure

Question

Leno4ka [110]

1 year ago

14

If an increase of $10 billion of investment results in an increase in equilibrium expenditure of $40 billion, the expenditure

multiplier equals.

Business

1 answer:

pogonyaev · Answer 1 · 2024-09-02T00:01:52+03:00

Based on the fact that the increase in investment led to such an increase in equilibrium expenditure, then the expenditure multiplier can be found to be E. $40 billion ÷ $10 billion = 4.

<h3>How to find the expenditure multiplier?</h3>

The expenditure multiplier shows how much expenditure will increase by, as a result of an increase in investment or other factors that bring about a cash injection into the economy.

The expenditure multiplier in this case, can be found by the formula:

= Equilibrium expenditure / Increase in investment

Solving for the Expenditure multiplier gives:

= 40 billion / 10 billion

= 4

Options for this question include:

A. $10 billion $40 billion = - $30 billion.
B. $40 billion $10 billion = $30 billion.
C. $10 billion x $40 billion = $400 billion.
D. $10 billion ÷ $40 billion = 0.25.
E. $40 billion ÷ $10 billion = 4

Find out more on expenditure multiplier at brainly.com/question/14486062

#SPJ1

If an increase of​ $10 billion of investment results in an increase in equilibrium expenditure of​ $40 billion, the expenditure

If an increase of $10 billion of investment results in an increase in equilibrium expenditure of $40 billion, the expenditure