Exhibit 10-8 -In Exhibit 10-8, the Spending Multiplier Equals

question 14

Multiple Choice

Exhibit 10-8

-In Exhibit 10-8, the spending multiplier equals

• A)1.43
• B)2.50
• C)3.33
• D)5
• E)10

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Definitions:

Equivalent

Equivalent refers to something being equal in value, function, or meaning, often used in financial contexts to compare different financial instruments or investments.

Cash Flows

The entirety of funds transferred inwards and outwards of a business, which is vital for maintaining operational liquidity.

Annuities

Financial products sold by financial institutions that are designed to accept and grow funds from an individual and then, upon annuitization, pay out a stream of payments to the individual at a later point in time.

Present Value

The current financial value of money to be obtained in the future or upcoming cash flow payments, quantified by a particular rate of return.