The Multiplier Effect

question 10

Multiple Choice

The multiplier effect

• A) promotes stability of the general price level.
• B) magnifies small changes in spending into larger changes in real GDP.
• C) generates instability in autonomous expenditure.
• D) increases the MPC.

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Definitions:

Acellular

Consisting of, or pertaining to, non-cellular structure, lacking cells.

Viruses

Microscopic infectious agents that replicate only inside the living cells of organisms, capable of causing a wide range of diseases.

Photosynthetic Bacteria

Bacteria capable of photosynthesis, a process that converts light energy into chemical energy, thereby producing oxygen as a by-product, crucial for earth's oxygen supply.

Chemosynthetic Bacteria

Microorganisms that obtain energy by converting inorganic molecules to organic matter, independent of sunlight.