Suppose Business Confidence Decreases Causing a Reduction in Investment

question 3

Multiple Choice

Suppose business confidence decreases causing a reduction in investment.Based on our understanding of the model presented in Chapter 3,we know with certainty that a reduction in investment will cause

• A)an increase in the multiplier.
• B)a reduction in the multiplier.
• C)a reduction in the marginal propensity to save.
• D)a reduction in consumption as the economy adjusts to this decrease in investment.

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Definitions:

CSR Programs

Corporate Social Responsibility programs are initiatives by businesses to conduct activities in an ethical manner and contribute positively to society.

Economic

Related to the production, consumption, and transfer of wealth and resources within a society.

Ethical Decision-Making Framework

A structured approach to evaluate and guide ethical decisions in a professional setting, often incorporating moral principles and company values.

Brainstorming

A collaborative idea generation process aimed at solving a problem or generating creative solutions.