The Multiplier Principle Explains How

question 18

Multiple Choice

The multiplier principle explains how

• A)any change in the economy will be magnified.
• B)$1 invested will increase GDP by more than $1.
• C)expenditures and incomes increase as investment increases.
• D)All of the above are correct.

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Definitions:

Managerial Accounting

The process of identifying, measuring, analyzing, interpreting, and communicating financial information to managers for the purpose of achieving organizational goals.

Management Accounting

The method of creating management reports and financial statements that offer precise and current financial and statistical data needed by managers for making daily and short-term choices.

Analytical Accounting

The practice of using financial and non-financial data to uncover trends and insights for business decision-making.

Planning

The process of making strategic decisions and setting objectives and goals for future organizational performance.