The Spending Multiplier Is Defined As

question 58

Multiple Choice

The spending multiplier is defined as:

• A) the ratio of the change in equilibrium real GDP to the initial change in spending.
• B) the change in initial spending divided by the change in personal income.
• C) 1 / (marginal propensity to consume).
• D) 1 / (1 − marginal propensity to save).

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Definitions:

Nominal

A term describing a scale of measurement where numbers serve as labels for identification or classification, without any quantitative value.

Ordinal

Relating to a category of data measurement levels that reflects the order of the values, but not the difference between them.

In-Basket Tests

A simulation exercise used in assessments whereby candidates prioritize and respond to a series of business-related tasks or emails.

Cognitive Ability

The capacity of an individual to perform mental processes like learning, reasoning, problem-solving, and decision making.