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:

W-2 Form

A tax form issued by employers to employees detailing the employee's annual wages and the amount of taxes withheld from their paycheck, critical for preparing individual income tax returns.

Form 1040

The standard Internal Revenue Service (IRS) form that individuals use to file their annual income tax returns.

Lookback Period

A set duration of time in the past during which relevant actions or financial transactions are reviewed for tax or regulatory purposes.

Semiweekly Schedule

A tax depositing schedule requiring payments to be made twice a week, often used by employers for payroll taxes.