The Multiplier Shows That as ________ Expenditure Changes, Real GDP

question 138

Multiple Choice

The multiplier shows that as ________ expenditure changes, real GDP changes by ________ amount.

• A)autonomous; an even larger
• B)autonomous; the same
• C)induced; the same
• D)induced; an even larger
• E)induced; a smaller

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Definitions:

Protective Covenants

Clauses in a contract or bond indenture that restrict the borrower from certain activities, aiming to protect creditors.

Real Rates

Interest rates or rates of return that have been adjusted for inflation, showing the real purchasing power of the amount.

Nominal Rates

Interest rates or rates of return on investment that have not been adjusted for inflation, representing the face value of financial instruments.

Effective Rates

The actual interest rate that a borrower pays on a loan or receives on a deposit, taking into account the compounding of interest.