The Expenditure Multiplier Indicates That

question 33

Multiple Choice

The expenditure multiplier indicates that

• A) changes in investment, government, or consumption spending can trigger much larger changes in output.
• B) an 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.

---

Definitions:

Three Phases

Typically refers to a conceptual division of a process or period into three distinct stages for ease of analysis or understanding.

Activity Theory

A theoretical framework that examines how human actions are mediated by tools and symbols, emphasizing the context of social and cultural development.

Disengagement Theory

A theory that suggests aging individuals gradually withdraw from social and societal roles and responsibilities, leading to increased self-reflection and decreased social interaction.

Late Adulthood

A stage of human development that typically refers to individuals aged 65 and older, often characterized by retirement, life review, and increased focus on health.