The Multiplier Is Defined as

question 116

Multiple Choice

The multiplier is defined as

• A)1 − MPS.
• B)change in GDP × initial change in spending.
• C)change in GDP/initial change in spending.
• D)change in GDP − initial change in spending.

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Definitions:

Net Income

The total earnings of a company after subtracting all expenses, including taxes and operating expenses.

Income Summary

An account used in the closing process that summarizes revenues and expenses for a specific period, facilitating the transfer of their net effect to capital or owner's equity.

Closing Entries

At the close of an accounting cycle, transactions are documented to move amounts from temporary accounts to those that are permanent.

Debit Balance

Occurs when the sum of debits in an account exceeds the sum of credits, reflecting an asset or expense increase or liability or equity decrease.