The Expenditure Multiplier Is Larger Than One Because

question 23

Multiple Choice

The expenditure multiplier is larger than one because

• A)an increase in autonomous expenditure induces further decreases in aggregate expenditure.
• B)additional expenditure induces lower incomes.
• C)an increase in autonomous expenditure induces further increases in aggregate expenditure.
• D)the price level rises, thereby reinforcing the initial effect.
• E)an increase in autonomous expenditure brings about a reduction in the real interest rate.

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Definitions:

DSM-5

The fifth edition of the Diagnostic and Statistical Manual of Mental Disorders, a key reference for diagnosing mental disorders.

Disruptive Mood Dysregulation

A psychiatric disorder characterized by severe and recurrent temper outbursts that are disproportionate to the situation and inconsistent with the developmental level.

Pathologizes

The process of viewing or treating behaviors and psychological experiences as indicative of disease or dysfunction.

Prevalence

The proportion of a population that is affected by a certain condition, disease, or characteristic at a specific time.