Which of the Following Is Equal to the Simple Multiplier

question 83

Multiple Choice

Which of the following is equal to the simple multiplier?  

• A) the marginal propensity to save 
• B) the marginal propensity to consume 
• C) the reciprocal of the marginal propensity to save 
• D) the reciprocal of the marginal propensity to consume

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Definitions:

Par-Value Bond

A bond that is issued and redeemed at its face value, which is the amount paid to the bondholder at maturity.

Coupon Rate

The annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity.

Duration

A measure of the sensitivity of the price of a bond or other debt instrument to changes in interest rates, usually expressed in years.

Bond Duration

A measure of the sensitivity of a bond's price to changes in interest rates, expressed in years.