The Spending Multiplier Indicates That

question 70

Multiple Choice

The spending multiplier indicates that:

• A) changes in investment, government, or consumption spending trigger much larger changes in real GDP.
• B) an autonomous increase in saving will cause output to rise by a multiple of the additional saving.
• C) a market economy will be more stable than classical economists thought.
• D) the marginal propensity to consume is greater than one.

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Definitions:

Interdependence

A condition where entities are reliant on each other, indicating a mutual dependency that influences outcomes and actions.

Group Favouritism

The tendency of individuals to give preferential treatment and favor members of their own group over those of other groups.

Group Identification

The extent to which individuals perceive themselves as being part of a group and align their attitudes and behaviors with group norms.

Organizational Conflict

Disagreements or confrontations between individuals or groups within an organization, often arising from differences in goals, values, or interests.