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All of the Following Statements About Multiplier Effect Are True

Question 5

Multiple Choice

All of the following statements about multiplier effect are true EXCEPT which?


A) Economic variables for which economists derive multiplier values do not include taxes and imports.
B) Island countries have very quick leakage and, therefore, very low output multipliers.
C) The multiplier effect is the sum of direct, indirect, and induced effects.
D) The multiplier effect occurs when some of the new money from the tourist is re-spent within the local economy.

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