The Multiplier Effect Is the Multiplied Impact on

question 79

Multiple Choice

The multiplier effect is the multiplied impact on

• A)the money supply of a given increase in government purchases.
• B)tax revenues of a given increase in government purchases.
• C)investment of a given increase in interest rates.
• D)aggregate demand of a given increase in government purchases.

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Definitions:

Output

The total amount of goods or services produced within a given period by a firm, industry, or economy.

Returns To Scale

The change in output resulting from a proportional change in all inputs (factors of production) in the long term, indicating whether the output increases, decreases, or stays the same.

Production Function

A mathematical expression that describes the relationship between inputs used in production and the output generated from those inputs.

Input

The resources used in the production process, such as labor, raw materials, and capital.