If an Increase in Investment of $50 Causes an Increase

question 172

Multiple Choice

If an increase in investment of $50 causes an increase in real GDP of $250, the value of the spending multiplier is:

• A)5.
• B).20.
• C).80.
• D)3.
• E)10.

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Definitions:

Norman Triplett

A psychologist known for his work on social facilitation, discovering that presence of others enhances performance on simple tasks.

Max Ringelmann

A French agricultural engineer known for his research into social psychology, particularly the Ringelmann effect which observes that individual productivity decreases as group size increases.

Social Psychology

Examination of the mechanisms through which humans understand, influence, and associate with others within a community framework.

Social Psychology

The scientific study of how individuals think, feel, and behave in social contexts and how the presence of others affects individual behavior.