The Government-Spending Multiplier

question 117

Multiple Choice

The government-spending multiplier:

• A)is calculated as 1/(1 - MPC).
• B)has a positive value.
• C)grows larger as the marginal propensity to consume increases.
• D)All of these are true.

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Definitions:

Misinformation Effect

The occurrence when an individual's memory of events is distorted due to information received after the event.

Encoding Failure

The phenomenon in which information does not enter the brain's long-term memory, typically resulting in the inability to recall this information later.

Event Imagined

The act of mentally visualizing or simulating a possible event in one's mind.

Memory Construction

The process by which our brain encodes, stores, and retrieves information, heavily influenced by our perceptions, beliefs, and experiences.