In a recent study, the University of Underfunded argued that it created four times as many jobs as people that it hired directly.This argument illustrates the idea
A)of the multiplier.
B)that universities are wasting taxpayers' dollars.
C)of the tax multiplier.
D)of government spending.
E)of the marginal propensity to consume.

Question

Quizplus · Accepted Answer

The argument made by the University of Underfunded is an example of the multiplier effect, which suggests that an initial increase in spending leads to a larger increase in total economic activity. In this case, the university's spending created four times as many jobs indirectly as it did through its direct hiring.

In a Recent Study, the University of Underfunded Argued That