The Simple Multiplier 1/MPS

question 61

Multiple Choice

The simple multiplier 1/MPS

• A)understates the actual multiplier because it includes leakages in domestic spending from the purchase of imports or the paying of taxes.
• B)understates the actual multiplier because it excludes leakages in domestic spending from the purchase of imports or the paying of taxes.
• C)overstates the actual multiplier because it includes leakages in domestic spending from the purchase of imports or the paying of taxes.
• D)overstates the actual multiplier because it excludes leakages in domestic spending from the purchase of imports or the paying of taxes.

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Definitions:

Monthly Payments

Regular payments made once per month, often used in the context of loans, leases, or other financial agreements.

Salary Deferral Plan

A type of retirement plan where employees opt to defer a portion of their salary, which is then invested on a pre-tax basis until withdrawal at retirement.

Compounded Semi-Annually

A method of calculating interest where the accrued interest is added to the principal amount twice a year, leading to interest on interest.

Month-End Contributions

Payments or deposits made towards an account or investment, typically recorded at the end of the month.