What Is the Economic Effect Whereby an Increase in Spending

question 2

Multiple Choice

What is the economic effect whereby an increase in spending (for example, of funds provided to a country by a donor) produces an increase in national income and consumption greater than the initial amount spent called?

• A)The untied aid effect
• B)The multiplier effect
• C)The export-led growth effect
• D)The network effect

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Definitions:

Realpolitik

A foreign policy approach focusing on practical and material factors, often favoring power and practicality over ideological considerations.

Global Scene

The current state of events or trends impacting the world at large, encompassing global issues and multinational interactions.

Covering Law

A principle that explains an event under a general law, typically used in the philosophy of science to describe how scientific explanations should function.

Normative Principle

A standard or rule that guides behavior based on what is considered right or wrong within a specific context.