Suppose Business Confidence Rises Causing an Increase in Investment

question 41

Multiple Choice

Suppose business confidence rises causing an increase in investment. From the goods market model we know with certainty that an increase in investment will cause:

• A) a decrease in the multiplier.
• B) an increase in output.
• C) an increase in the propensity to save.
• D) a decrease in the propensity to save.
• E) an increase in the multiplier.

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Definitions:

Intrinsic Motivation

The drive to perform activities for the inherent satisfaction or pleasure derived from doing the activity itself, rather than for an external reward.

External Reward

Any benefit or reinforcement received from the environment in response to an action, often motivating behavior.

Primary Motivation

The fundamental driving force behind an individual's actions, interests, or goals.

Intrinsic Motivation

The drive to engage in an activity for its own sake, rather than for some external reward or outcome.