The Impact of the Multiplier Effect Is To

question 2

Multiple Choice

The impact of the multiplier effect is to:

• A) smooth out the up and down swings of the business cycle.
• B) promote price stability.
• C) magnify small changes in spending into much larger changes in real GDP.
• D) reduce the impact of an increase in investment on output and employment.

---

Definitions:

18th Century

The century spanning the years 1701 to 1800, marked by significant historical events, including the Enlightenment, the American Revolution, and the beginnings of the Industrial Revolution.

19th Century

The period from January 1, 1801, to December 31, 1900, characterized by major social, economic, and technological changes.

Public Policy

Public policy consists of the system of laws, regulatory measures, courses of action, and funding priorities by a governmental entity or its representatives.

Government Outsourcing

The practice of government agencies contracting external organizations or companies to provide services or perform tasks that were previously done by public employees.