Because of the ________ Effect, a Dollar Spent Will Contribute

question 13

Multiple Choice

Because of the ________ effect, a dollar spent will contribute two or three dollars of activity to the economy.

• A) distribution
• B) bullwhip
• C) butterfly
• D) accelerator

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Definitions:

Promissory Estoppel

A legal principle preventing a party from backing out of a promise made, when the other party has relied on that promise to their detriment.

Consideration

The value (usually money, service, or goods) exchanged between parties in a contract that compels them to fulfill their mutual obligations.

Preexisting Duty

An obligation that a party is already bound to by law or by some other agreement. The party may not use this as consideration in a new contract.

Promissory Estoppel

A judicial principle that stops one from retracting a pledge given to another if the latter has justifiably depended on the promise to their disadvantage.