The Two Factors That Determine the Size of the Multiplier

question 61

Multiple Choice

The two factors that determine the size of the multiplier are the

• A) marginal propensity to consume and the amount of overseas leakage.
• B) amount of imports and the amount of exports.
• C) amount of spending and the number of jobs.
• D) unemployment rate and the inflation rate.

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Definitions:

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Fundamental ideas that underpin a subject or field of study, serving as the foundation for further knowledge and understanding.

Mental Set

A psychological tendency to approach situations in a certain way because that method has worked in the past, which can limit problem-solving abilities.

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The scientific name for the human species, characterized by a high level of intelligence, complex language, and the ability to create and manipulate the environment.

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A concept in economics and philosophy that assumes an individual acts logically and with complete information, aiming to maximize personal benefit.