Multipliers Amplify an Initial Shock

question 143

Multiple Choice

Multipliers amplify an initial shock.When do multiplier effects take place?

• A) During recessions only
• B) During expansions only
• C) During both recessions and expansions
• D) During both recessions and expansions, but only if the economy is not at full employment

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Definitions:

Odd-even Pricing

A pricing strategy that involves setting prices just below a round number, e.g., $99.99 instead of $100, to make a product seem less expensive.

Target Pricing

A pricing method in which a company sets a price based on what the customer is willing to pay and then designs the product to meet that price.

Ultimate Consumers

End-users of a product or service who purchase it for personal, family, or household use, rather than for business purposes.

Odd-even Pricing

A pricing strategy that sets prices just below a round number to create a perception of value, e.g., pricing an item at $19.99 instead of $20.