When an Initial Spending Change Causes a Larger Change in Overall

question 1

Multiple Choice

When an initial spending change causes a larger change in overall output, this exemplifies:

• A) the multiplier effect.
• B) crowding out.
• C) the income effect.
• D) the substitution effect.

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Definitions:

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The beneficial impact or positive outcome resulting from a particular action, behavior, or policy.

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The transmission of physical or mental traits through genes from one generation to the next.