The Basic Idea Behind the Multiplier Is That an Increase

question 120

Multiple Choice

The basic idea behind the multiplier is that an increase in

• A)GDP brings about an additional, larger increase in GDP.
• B)consumer spending causes a larger increase in investment spending.
• C)government spending causes a larger increase in tax revenues.
• D)spending will cause an even larger increase in equilibrium GDP.

Analyze the effects of inflation on currency value and purchasing power.

Recognize how exchange rates impact international trade and goods' pricing.

Understand purchasing-power parity and its exceptions.

Evaluate how changes in the money supply influence the value of domestic and foreign currency.