IMPC6 what is the spending 3 1.66 n) 2.5 the shot mu ana ad AD) Starting at equi

Question

IMPC6 what is the spending 3 1.66 n) 2.5 the shot mu ana ad AD) Starting at equitibrium point d, if the cost of int .---, and thus real output will D)4 21 Pure: Shifts in and the price level will TRAS AD ADo AD Aggregate Output (a) A) c; stay the same; increase B) a; decrease; stay the same C) b; decrease; increase D) There is not enough information to answer this question. 22 Which factor of producti on enhances the productive capacity of all other resources in th production function? A) technology B) labor C) natural resources D) physical capital

Explanation / Answer

Question 20). Answer :- Option B) 2.5

Explanation :- Spending multiplier (k) = 1 / (1 - MPC)

= 1 / (1 - 0.6)

= 1 / 0.4

= 2.5

Conclusion :- Spending multiplier (k) = 2.5 (Option B).

Question 21). Answer :- Option C). b; decrease; increase.

Question 22). Answer :- Option D). Physical capital.

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