How do income and/or expenditures explain the multiplier effect?
A)the fact that income by one person are expenditures to another
B)the fact that income by one person is income to another
C)the fact that expenditures by one person are expenditures to another
D)the fact that expenditures by one person is income to another

Question

Quizplus · Accepted Answer

The multiplier effect is based on the idea that an increase in expenditures by one person (such as through government spending or investment) will lead to an increase in income for another person. This increased income can then be spent, further stimulating the economy through additional expenditures and creating a ripple effect or "multiplier" effect throughout the economy. Therefore, expenditures by one person can lead to income for another person, explaining the multiplier effect.

How Do Income And/or Expenditures Explain the Multiplier Effect