The multiplier principle explains how
A) any change in the economy has a one-time impact.
B) $1 invested will increase GDP by more than $1.
C) expenditures and incomes decrease as investment increases.
D) $1 invested will decrease GDP by less than $1.
Correct Answer:
Verified
Q165: The formula for the multiplier can be
Q166: Investment increases by $200 million and the
Q167: Figure 9-5 Q168: Assume that the MPC is 0.9 and Q169: The economic impact of the multiplier is Q171: The economic impact of a change in Q172: The multiplier principle is built on the Q173: Assume that the MPC is 0.85 and Q174: The basic reason for the multiplier effect Q175: An increase in investment spending will be
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