For the full multiplier effect to occur, there must be
A) some idle resources in the economy, which results in a constant price level
B) full employment in the economy, which results in rising prices
C) consumers in the economy who are not affected by changing interest rates
D) no businesses investment in the economy

Question

Quizplus · Accepted Answer

For the full multiplier effect to occur, there must be some idle resources in the economy. This allows increased spending to lead to more production rather than just higher prices, facilitating the multiplier effect without causing inflation.

For the Full Multiplier Effect to Occur, There Must Be