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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
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Answer: Option (C)
Explanation:
Sociological factors are referred to as or known as elements or factors of the society that tends to radiate negative and positive influence which cause a change in function, structure, elements, and orientation. Sociology tends to mostly study society in regards with its elements, structure, and their development which mostly includes numerous factors such as people and the population, ethnicity, age, gender, religion, view , culture, and etc.
I believe it’s false
when interest rates are low, the economy grows and inflation increases. Conversely, when interest rates are high, the economy slows and inflation decreases.
