The Oversimplified Formula for the Multiplier Yields a Number That

question 163

Multiple Choice

The oversimplified formula for the multiplier yields a number that is too large due to the exclusion of

• A)variable imports.
• B)changes in the price-level.
• C)income taxes.
• D)All of the above.

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Definitions:

Opportunity Cost

The cost of foregoing the next best alternative when making a decision or choosing an action.

Tuition

The fee for instruction at a school, university, or college.

Room And Board

The combined cost of housing (room) and food/meals (board) typically for students living on a college campus.

Opportunity Cost

The loss of potential gain from other alternatives when one alternative is chosen, a fundamental concept in economics.