20. The Federal Reserve was very worried about deflation in early 2009, which would raise real interest rates. Suppose the rate of deflation was 2%, unemployment went up 4%, investment spending fell $20 billion during that time, and that the multiplier was 2.

Using the information given above, put the relevant data into the formula that defines the spending multiplier in your answer to question 19. Please do not calculate any answer in this question that will be done in question 21. Use of abbreviations used in class content for economic variables is OK.

21. Based on your answer in question #20, calculate the change in equilibrium U.S. GDP. Be sure to show your calculation for this answer.