Which of the Following Makes the Multiplier Larger

question 13

Multiple Choice

Which of the following makes the multiplier larger?

• A) an increase in the marginal propensity to import
• B) an increase in the marginal propensity to consume
• C) an increase in the marginal propensity to save
• D) an increase in the tax rate

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Definitions:

End-Of-Period Spreadsheet

A tool used in accounting to gather all the balances of ledger accounts to calculate adjustments and prepare financial statements at the end of an accounting period.

Closing Entry

A journal entry made at the end of an accounting period to transfer balances from temporary accounts to permanent accounts, essentially resetting the temporary accounts for the new period.

Post-Closing

The final phase in the accounting cycle where accounts are prepared for the start of the next period, following the closing entries are made to reset temporary accounts.

Adjusted Trial Balance

A statement listing all accounts and their balances after adjustments, used to verify the equality of debits and credits before preparing financial statements.