Which of the Following Equations Defines the Multiplier

question 67

Multiple Choice

Which of the following equations defines the multiplier?

• A)1 - b
• B)1 - (c ÷ Y_D).
• C)1 ÷ (1 - MPC).
• D)1 ÷ APS.

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Definitions:

Fixed

Costs that do not change with the level of production or sales activity, such as rent, salaries and insurance.

Variable

A quantity that can change or vary, often used in mathematics and statistics to represent an element that can assume different values.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, influenced by the proportion of fixed to variable costs.

Fixed Costs

Fixed Costs are business expenses that remain constant regardless of the level of production or sales activity, such as rent, salaries, and insurance.