The Multiplier Measures the

question 401

Multiple Choice

The multiplier measures the

• A) horizontal shift in the aggregate demand curve from an increase in autonomous spending.
• B) vertical shift in the aggregate demand curve from an increase in autonomous spending.
• C) horizontal difference between two points on the same aggregate demand curve.
• D) vertical difference between two points on the same aggregate demand curve.

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Definitions:

Federal Government

A system of government in which power is divided between a central authority and constituent political units, such as states or provinces.

Central Planning

An economic system where key decisions regarding production, investment, and distribution are made by the government or a central authority, rather than left to market forces.

Consumer Goods

Products and services that satisfy human wants directly.

Dollar Votes

A term suggesting that consumers participate in the market and influence production and consumption patterns through their spending choices.