The Multiplier Is Larger If the

question 231

Multiple Choice

The multiplier is larger if the

• A) marginal propensity to save is larger.
• B) income tax rate is higher.
• C) marginal propensity to consume is larger.
• D) marginal propensity to import is larger.

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Definitions:

Periodic Inventory System

An inventory accounting system where stock levels are updated at regular intervals, not continuously.

Gross Profit

Gross profit is the difference between sales revenue and the cost of goods sold, indicating how efficiently a company is producing or sourcing its products.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, showing revenue, expenses, and net income.

Perpetual Inventory System

A procedural method in inventory accounting that directly records every inventory sale or purchase with the aid of computerized point-of-sale systems and enterprise asset management software.