Which of the Following Correctly Describes the Multiplier in an Economy

question 72

Multiple Choice

Which of the following correctly describes the multiplier in an economy?

• A) It is a measure of how much consumption increases as consumers' income grows.
• B) It is a measure of how much output grows following an increase in autonomous
• C) It is a measure of how much consumption falls as savings increases.
• D) It is a measure of how much investment increases as the interest rate falls.

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Definitions:

Capacity Alternatives

Different strategies or options available to an organization to adjust or increase its production or service capacity to meet variations in demand.

Market Acceptance

The degree to which a new product or service is accepted and purchased by customers in the market.

Variable Cost

Expenses that vary directly with the level of production or sales volume, such as raw materials and direct labor costs.

Fixed Cost

Costs that do not vary with the volume of production or sales, such as rent, salaries, and insurance premiums.