An Increase in the Value of the Simple Multiplier Can

question 104

Multiple Choice

An increase in the value of the simple multiplier can be caused by

• A)a decrease in the marginal propensity to consume.
• B)an increase in the marginal propensity to import.
• C)an increase in the net tax rate.
• D)an increase in the marginal propensity to save.
• E)a decrease in the net tax rate.

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Definitions:

Direct Labor

Direct labor costs are the wages paid to workers directly involved in the production of goods or services. These costs are directly traceable to the cost object, such as a product unit.

Materials Price Variance

The difference between the actual cost of materials used in production and the expected (or standard) cost, which can indicate changes in materials prices or sourcing efficiency.

Direct Materials

Basic substances used explicitly in the production of a particular item, which can be directly linked to its creation.

Materials Price Variance

The difference between the actual cost of materials used in production and the expected cost based on standard prices.