Suppose That the Value of the Multiplier Has Increased in Recent

question 227

Multiple Choice

Suppose that the value of the multiplier has increased in recent years. Which of the following could have caused this?

• A) Consumption has become more sensitive to changes in the interest rate.
• B) The costs of inventory storage have fallen.
• C) Changes in the way the unemployment compensation fund is financed have made it more expensive for firms to lay off workers.
• D) "Buy America" campaigns launched by many unions have succeeded in reducing the demand for imported goods.

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Definitions:

Perpetual Payment

A series of payments that continue indefinitely, often used in the context of perpetuities in finance.

Effective Yield

The actual return on an investment, accounting for compounding interest or reinvestments.

Mortality Rates

The frequency of deaths in a given population during a specific period, often expressed per 1,000 or 100,000 individuals annually.

Income Loss

A reduction in the amount of money received or earned as income, often due to unemployment or decreased business activities.