The Multiplier Effect Shows That a Change in Aggregate Spending

question 214

Multiple Choice

The multiplier effect shows that a change in aggregate spending

• A) causes output to move in the opposite direction.
• B) causes output to change even more than the change in aggregate spending.
• C) causes output to change by less than the change in aggregate spending.
• D) leaves output unaffected.

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Definitions:

American Exports

Goods or services produced within the United States that are sold or provided to other countries, contributing to the nation's economy.

Economic Well-Being

Refers to the condition where individuals or societies have their basic needs met and are able to improve their standards of living, achieving a level of financial security and access to resources that allow for a comfortable life.

International Law

A body of rules and principles that governs the relations and interactions between nations.

Unrestricted Submarine Warfare

A type of naval warfare in which submarines attack merchant ships without warning, as practiced by Germany in both World Wars.