The Multiplier Effect States That There Are Additional Shifts in Aggregate

question 34

Multiple Choice

The multiplier effect states that there are additional shifts in aggregate demand from expansionary fiscal policy, because it

• A)reduces investment and thereby increases consumer spending.
• B)increases the money supply and thereby reduces interest rates.
• C)increases income and thereby increases consumer spending.
• D)decreases income and thereby increases consumer spending.

---

Definitions:

Expected Revenue

The total amount of money anticipated to be received from sales of goods or services, based on expected sales volumes and prices.

English Auction

A common auction format where the price starts low and is bid upwards by participants, with the item being sold to the highest bidder.

Reservation Price

The top price a consumer agrees to pay for a product or service.

Expected Revenue

The anticipated amount of money that will be generated from sales of goods or services in a given period, often based on historical data and market analysis.