The Size of the Expenditure Multiplier

question 33

Multiple Choice

The size of the expenditure multiplier

• A)changes with a change in investment spending
• B)increases as the mps increases
• C)increases as the mps decreases
• D)increases as the income tax rate increases
• E)varies with the apc

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Definitions:

Standard of Living

A level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class in a certain geographic area.

Technological Improvements

Advances in technology that enhance productivity, efficiency, or quality in goods and services.

Long Run

In economics, the Long Run is a period during which all factors of production and costs are variable, allowing for full industry adjustment to changes.

Per-worker Production Function

A mathematical representation showing how the amount of output produced per worker varies with the amount of capital or other inputs used per worker.