The Multiplier Principle Indicates That If Business Decision Makers Become

question 111

Multiple Choice

The multiplier principle indicates that if business decision makers become more optimistic about the future and, as a result, increase their investment expenditures by $82 billion, real GDP

• A) will increase by less than $82 billion if the economy was initially operating well below capacity.
• B) will increase by more than $82 billion if the economy was initially operating well below capacity.
• C) will increase by more than $82 billion if the economy was initially operating at full-employment capacity.
• D) will decline if the marginal propensity to consume is less than 1.

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Definitions:

Aesthetic Needs

Needs that relate to appreciation and search for beauty, form, and artistic harmony.

Esteem Needs

A psychological necessity for human beings that entails the desire for self-respect, self-esteem, and the respect of others; part of Maslow's hierarchy of needs.

Self-actualization

The realization or fulfillment of one's talents and potentialities, often considered as the drive for personal development and peak experiences.

Artistic Endeavours

Creative activities or projects that involve art, such as painting, writing, or performing.