The Multiplier Shows That as ____________Changes, Real GDP Changes by A__________

question 293

Multiple Choice

The multiplier shows that as ____________changes, real GDP changes by a__________ amount.

• A) induced expenditure; larger
• B) autonomous expenditure; larger
• C) induced expenditure; smaller
• D) autonomous expenditure; smaller

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Definitions:

Variable Costs

Costs that change in proportion to the level of activity or production volume, such as raw materials and direct labor.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and are a significant part of its composition.

Actual Cost

The actual amount spent on goods, services, and labor to produce an item or to run a company.

Data Collected

The process of gathering and measuring information on targeted variables to answer relevant questions and evaluate outcomes.