Which of the Following Increases the Size of the Expenditure

question 246

Multiple Choice

Which of the following increases the size of the expenditure multiplier?

• A) a decrease in the marginal propensity to consume
• B) an increase in autonomous spending
• C) an increase in the marginal income tax rate
• D) a decrease in the marginal propensity to import
• E) an increase in investment

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Definitions:

Net Income

A company's overall earnings following the deduction of all expenses and taxes from its total revenue.

Adjusting Entry

An adjusting entry is a journal entry made in the accounting records at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Expense Account

An account used to record individual expenditures or expenses incurred during business operations.

Liability Account

An account recording a company's obligations to pay debts to creditors in the short or long term.