Which of the Following Is a True Statement About the Multiplier

question 9

Multiple Choice

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

• A)The multiplier rises as the MPC rises.
• B)The smaller the MPC,the larger the multiplier.
• C)The multiplier is a value between zero and one.
• D)The multiplier effect does not occur when autonomous expenditure decreases.

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Definitions:

Payment Interval

The length of time between successive payments in an annuity.

Registered Retirement Savings Plan

A savings and investment account, primarily used in Canada, that provides tax benefits for retirement savings.

Compounded Monthly

Interest calculated and added to the principal balance each month.

Compounded Quarterly

Calculation of interest done four times a year, where the interest is added to the principal and each subsequent interest computation is based on the new principal amount.