If the Multiplier Is 6 and Exports Decrease by $30

question 266

Multiple Choice

If the multiplier is 6 and exports decrease by $30, what impact will that have on aggregate expenditure? Aggregate expenditure will

• A) increase by $30.
• B) increase by $180.
• C) decrease by $30.
• D) decrease by $180.

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Definitions:

Mutual Fund

An investment vehicle made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments.

Compounded Monthly

The method of determining interest that includes both the original principal sum and the interest that has previously been added up over past months.

Invest

Allocating resources, usually money, in the expectation of generating an income or profit.

Interest Rate

It is the amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal.