The multiplier effect of an increase in government purchases of goods and services is larger than the multiplier effect of a tax cut because: A. initially some of the tax cut will be saved while all of the government purchases will be spent. B. many households fail to file their income tax and claim their refund. C. the government pays a higher price than households for the same goods and services. D. production of the goods and services the government purchases has a bigger impact on real GDP than production of consumer goods.

The blumer company entered into the following transactions during 2012: 1. the company was started with $22,000 of common stock issued to investors for cash. 2. on july 1, the company purchased land that cost $15,500 cash. 3. there were $700 of supplies purchased on account. 4. sales on account amounted to $9,500. 5. cash collections of receivables were $5,500. 6. on october 1, 2012, the company paid $3,600 in advance for a 12-month insurance policy that became effective on october 1. 7. supplies on hand as of december 31, 2010 amounted to $225. the amount of cash flow from investing activities would be: