When the economy is in a recession, the government will want to increase output. If the multiplier equals 2.7 and the government increases spending by 145, how much will output increase by?

the increase in the output is 391.50

Explanation:

The computation of the increase in the output is shown below:

Given that

The Multiplier is 2.7

And, there is an increase in government spending by 145

So, the output would increased by

= Multiplier × increase in government spending

= 2.7 × 145

= 391.50

Hence, the  increase in the output is 391.50

We simply applied the above formula so that the correct value could come

And, the same is to be considered

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