The Size of the Multiplier Associated with an Initial Increase

question 47

Multiple Choice

The size of the multiplier associated with an initial increase in spending will be

• A) the same whether or not inflation occurs.
• B) diminished if inflation occurs.
• C) zero if any increase in the price level occurs.
• D) enhanced if inflation occurs.

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Definitions:

Nursery

A place specifically designed for the care and growth of young plants, trees, or children, providing appropriate conditions for development.

Sea

A large body of saltwater that is often connected to an ocean and may be partially or completely surrounded by land.

Estuary

A partially enclosed coastal body of water with one or more rivers or streams flowing into it, and with a free connection to the open sea.

Epilimnion

The upper layer of water in a stratified lake, which is warm and well-oxygenated during the summer.