Which of the following is INCORRECT?
A)The multiplier dampens the increase in income that occurs during expansions and brings the economy to a new equilibrium GDP.
B)Firms experience unplanned decreases in inventories as expansions begin.
C)Firms increase production in response to unplanned decreases in inventories.
D)Expansions usually begin with an increase in autonomous spending.

Question

Quizplus · Accepted Answer

The multiplier amplifies the increase in income during expansions, rather than dampening it, leading to a new equilibrium GDP.

Which of the Following Is INCORRECT