An Example of the Multiplier Effect Is When

question 77

Multiple Choice

An example of the multiplier effect is when

• A) the government increases government spending initially by $100 billion,and total income in the economy increases by less than $100 billion.
• B) an increase in the price level leads to a shift in the aggregate demand curve.
• C) the government increases government spending initially by $100 billion,and total income in the economy increases by more than $100 billion.
• D) an increase in government spending leads to a decrease in private investment.
• E) short-run aggregate supply shifts in a response to fiscal policy.

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