A Decrease in the Value of the Simple Multiplier Can

question 120

Multiple Choice

A decrease in the value of the simple multiplier can be caused by

• A)a decrease in the net tax rate.
• B)a decrease in the marginal propensity to import.
• C)an increase in the marginal propensity to consume.
• D)an increase in the marginal propensity to save.
• E)an increase in the marginal propensity to spend.

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Definitions:

Annual Interest Rate

The annual interest rate is the percentage increase in money that one earns or pays on an investment or loan over the span of one year.

Compounded Monthly

Refers to the process where interest is added to the principal balance of an investment or loan, and future interest calculations are made on the new total, on a monthly basis.

Annual Interest Rate

The percentage increase in money owed or invested over a year, accounting for the cost of borrowing or the gain on savings.

Compounded

In finance, refers to a method where interest earned is added to the principal, so that, from that moment on, the interest that has been added also earns interest.