The practical significance of the multiplier is that it
A) equates the real interest rate and the expected rate of return on investment.
B) magnifies initial changes in spending into larger changes in GDP.
C) keeps inflation within tolerable limits.
D) helps to stabilize the economy.
Correct Answer:
Verified
Q84: The average propensity to consume is defined
Q86: (Last Word) Art Buchwald's article "Squaring the
Q87: (Consider This) During the Great Recession of
Q92: If a $100 billion decrease in investment
Q141: Assume the MPC is 2/3. If investment
Q142: If the MPC is 0.70 and investment
Q147: The multiplier applies to
A) investment but not
Q162: 1 − MPC = MPS.
Q163: The actual multiplier effect in the U.S.
Q167: A $1 billion increase in investment will
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents