The Multiplier Measures the

question 401

Multiple Choice

The multiplier measures the

• A) horizontal shift in the aggregate demand curve from an increase in autonomous spending.
• B) vertical shift in the aggregate demand curve from an increase in autonomous spending.
• C) horizontal difference between two points on the same aggregate demand curve.
• D) vertical difference between two points on the same aggregate demand curve.

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Definitions:

Monopolistically Competitive

A market structure characterized by many firms selling similar but not identical products, with some control over prices.

Purely Competitive

A market structure characterized by a large number of small firms, a homogeneous product, and free entry and exit in the market.

Herfindahl Index

A measure of the size of companies in relation to the industry and an indicator of the amount of competition among them.

Market Shares

The proportion of total sales or revenue in a market accounted for by a particular company, indicating its dominance in the market.