Which of the Following Is a True Statement About the Multiplier

question 117

Multiple Choice

Which of the following is a true statement about the multiplier?

• A)The formula for the multiplier overstates the real world multiplier when we take into account the impact of changes in GDP on imports, inflation, and the interest rate.
• B)The larger the MPC, the smaller the multiplier.
• C)The multiplier is the ratio of the change in spending to the change in GDP.
• D)The multiplier makes the economy less sensitive to changes in autonomous expenditure.
• E)The multiplier only applies to changes in government spending.

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Definitions:

Shareholders

Individuals or entities that own shares in a corporation, giving them partial ownership and certain rights within the company.

Stakeholder

An individual, group, or organization that has interest or concern in an organization and can affect or be affected by the organization's actions, objectives, and policies.

Operations

The day-to-day activities involved in the running of a business for the purpose of producing value for the stakeholders; focuses on manufacturing and service processes.

Leadership and Navigation

The ability to direct and influence others towards achieving organizational goals while successfully navigating through complexity, change, or challenge.