The Multiplier Effect Indicates That

question 120

Multiple Choice

The multiplier effect indicates that:

• A)a decline in the interest rate will cause a proportionately larger increase in investment.
• B)a change in aggregate expenditures will change aggregate income by a larger amount.
• C)a change in aggregate expenditures will increase aggregate income by the same amount.
• D)a small increase in total income will generate a large change in aggregate expenditures.

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Definitions:

Exponent

The number of times that the base is used in repeated multiplication.

Solve For Vf

The process of calculating the future value of an investment or loan based on given variables and interest rates.

Nearest Cent

Rounding a monetary amount to the closest hundredth of a dollar.

Solve For P

The process of finding the value of the variable 'P' in a mathematical equation.