Which of the following best describes the multiplier effect?
A) An initial increase in aggregate supply leads to a larger increase in national income.
B) An initial increase in aggregate demand leads to a larger increase in national income.
C) An initial increase in government income leads to a larger increase in national income.
D) An initial increase in interest rates leads to a larger increase in national income.
Correct Answer:
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Q11: If the MPC is 0.8, and savings
Q12: When Richard's income is £20,000 he saves
Q13: The change in imports caused by a
Q14: Income increased by £1,000 and imports increased
Q15: If the marginal propensity to import is
Q17: The multiplier can be calculated using which
Q18: The effect of a sustained increase in
Q19: When government spending or investment increases in
Q20: Assuming no government or foreign sector, if
Q21: Assuming there is no government or foreign
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