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:

Transferable Shares

Stocks or shares in a company that can be sold or transferred from one party to another without restrictions.

Limited Liability Companies

An organizational model that merges the direct tax benefits seen in partnerships or sole proprietorship with the benefit of reduced personal liability found in a corporation.

Qualification

The attributes, knowledge, or skills required to perform a particular job or activity, or the act of meeting such criteria.

States

Politically organized bodies of people under a single government, often referring to the constituent entities that make up a federal union, such as in the United States.