Because of the Multiplier Effect, an Increase in Government Spending

question 131

True/False

Because of the multiplier effect, an increase in government spending of $200 billion will increase aggregate output by less than that amount.

---

Definitions:

Investor

An individual or entity that allocates capital with the expectation of receiving financial returns.

Stock

A financial asset representing a share of ownership of a corporation. Entitles the owner to dividends if any are paid.

Activist Investors

Activist investors are shareholders that use their equity stake in a corporation to influence its management and operations, often with the goal of increasing shareholder value.

Institutional Investors

Large entities, such as pension funds, mutual funds, and insurance companies, that make substantial investments in various financial markets.