The multiplier effect is the change in:
A) income-determined spending generated by a change in total output.
B) total output generated by a change in income-determined spending.
C) total output generated by a change in nonincome-determined spending.
D) nonincome-determined spending generated by a change in total output.

Question

Quizplus · Accepted Answer

The multiplier effect refers to the increase in final income arising from any new injection of spending. The correct answer is C) total output generated by a change in nonincome-determined spending, as it accurately describes how an initial change in spending (not directly related to income changes, such as government spending or investment) leads to a larger change in the total output of the economy.

The Multiplier Effect Is the Change In