Which of the Following Best Describes the Multiplier

question 42

Multiple Choice

Which of the following best describes the multiplier?  

• A) It shows the magnified change in planned aggregate spending that arises from a change in output. 
• B) It shows the magnified change in planned aggregate spending that arises from a change in equilibrium output. 
• C) It shows the magnified change in equilibrium output demanded that arises from a change in income. 
• D) It shows the magnified change in equilibrium output demanded that arises from a change in planned aggregate spending.

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Definitions:

Utility Maximizing

Acting in a way to achieve the highest level of satisfaction possible with available resources.

Demand For Labor

The total amount of labor that employers want to hire at various wage rates, contingent on factors such as technology, the price of the goods being produced, and the availability of other inputs.

Reduced Wage

A wage that is decreased from a previous level, often due to economic pressures or changes in job responsibilities.

Income Effect

The alteration in a person's or economic system's earnings and the effect of this alteration on the demand for a particular product or service.