The Multiplier Effect

question 6

Multiple Choice

The multiplier effect:

• A)reduces the MPC.
• B)magnifies small changes in spending into larger changes in output and income.
• C)promotes stability of the general price level.
• D)lessens upswings and downswings in business activity.

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Definitions:

Implied Warranties

Warranties that are not expressly stated but are assumed by law to exist in a sales contract to protect the buyer.

Common Law

A legal system grounded in established precedents and traditions, not on written statutes.

Constructive Eviction

Occurs when a landlord's failure to maintain the leased premises effectively forces the tenant to leave due to uninhabitable conditions.

Implied Warranty

An assurance, not explicitly stated, that a product meets certain quality and reliability standards.