Figure 10-2 ​

question 126

Multiple Choice

Figure 10-2
​
-One reason the oversimplified multiplier is incorrect is that inflation

• A)increases the multiplier by increasing investment spending.
• B)increases the multiplier by increasing consumer spending.
• C)decreases the multiplier by increasing net exports.
• D)decreases the multiplier by decreasing consumer spending.

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Definitions:

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Hypotheses

Proposed explanations or predictions that can be tested by observations or experiments.