The Reason for the Multiplier Effect Is That

question 74

Multiple Choice

The reason for the multiplier effect is that

• A)businesses make decisions about investment projects based on anticipated profits.
• B)one person's additional expenditure creates a new source of income for another person, and this additional income leads to still more spending.
• C)changes in government spending typically deepen recessions and exacerbate inflationary conditions in the economy.
• D)additional spending lowers the rate of interest and leads to further borrowing and spending.

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Definitions:

Retina

A layer at the back of the eyeball containing cells that are sensitive to light and that trigger nerve impulses that pass via the optic nerve to the brain, resulting in visual perception.

Fovea

A small depression in the retina of the eye where visual acuity is highest due to the concentration of cones.

Common Cause

A factor that simultaneously affects multiple variables, leading to an association between them.

Blindness

The condition of lacking visual perception due to physiological or neurological factors.