The Multiplier Effect Means That

question 177

Multiple Choice

The multiplier effect means that:

• A)consumption is typically several times as large as saving.
• B)a small change in consumption demand can cause a much larger increase in investment.
• C)a small decline in the MPC can cause equilibrium GDP to rise by several times that amount.
• D)a small increase in investment can cause national income to change by a larger amount.

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