Assume a Multiplier Effect,some Crowding Out and No Accelerator Effect

question 152

Multiple Choice

Assume a multiplier effect,some crowding out and no accelerator effect An increase in government expenditures changes aggregate demand more

• A)the smaller the MPC and the farther an increase in income shifts money demand.
• B)the smaller the MPC and the less an increase in income shifts money demand.
• C)the larger the MPC and the farther an increase in income shifts money demand.
• D)the larger the MPC and the less an increase in income shifts money demand.

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Definitions:

Indirect Costs

Overhead or administrative expenses that are not directly attributable to a specific product or service, but are necessary for the business operations.

Initial Direct Costs

Costs that are directly associated with securing a financing agreement or leasing an asset, excluding general overhead.

Revenue Recognition

An accounting principle that determines the specific conditions under which income becomes realized as revenue.

Completed Contract

This accounting practice records the income and expenses of projects after they are finalized, ensuring financial statements only reflect finished work.