The Multiplier Effect Means That Aggregate Demand Curve Will Shift

question 20

Multiple Choice

The multiplier effect means that aggregate demand curve will shift by a larger amount than the increase in _____________.

• A) consumer spending.
• B) budget revenues.
• C) government spending.
• D) the aggregate supply.

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Definitions:

Meaningful Encoding

The process of converting information into a form that can be stored in memory, using associations with knowledge already stored in the memory to make the new information more memorable.

Proactive Interference

The disruptive effect of prior learning on the recall of new information.

Previously Learned Information

Knowledge or data that an individual has acquired and stored in memory through past experiences or education.

New Information

Data or facts received or learned about something or someone for the first time.