The Simple Multiplier,which Applies to Short-Run Situations in Which the Price

question 139

Multiple Choice

The simple multiplier,which applies to short-run situations in which the price level is constant,describes changes in

• A)investment induced by changes in equilibrium income.
• B)saving caused by changes in investment.
• C)the equilibrium level of national income caused by changes in autonomous expenditure.
• D)the rate of interest caused by increased demand for credit.
• E)employment induced by changes in equilibrium income.

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Definitions:

Competition-Oriented

A strategic approach focused on analyzing and reacting to the actions of competitors.

Demand-Oriented

An approach where pricing, production, and marketing decisions are based on consumer demand and preferences.

Predatory Pricing

A pricing strategy where a product or service is set at a very low price with the intent of driving competitors out of the market or creating barriers to entry for potential new entrants.

Price Fixing

A practice where businesses agree on the selling price of their products or services, typically to prevent competition and increase profits, which is often illegal.