The Multiplier Effect Occurs Because

question 122

Multiple Choice

The multiplier effect occurs because

• A)as saving levels increase,a greater pool of loanable funds is available for investment spending by businesses.
• B)increases in income cause a chain reaction of spending by many businesses and individuals.
• C)increases in income cause tax revenues to increase,thereby stimulating increases in government spending levels.
• D)businesses copy the spending decisions of their competitors.
• E)households tend to spend any increase in incomE.

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Definitions:

Calculators

Electronic devices or software used to perform calculations, ranging from simple arithmetic to complex mathematical operations.

World Trade Organization

An international body that deals with the rules of trade between nations, aiming to ensure that trade flows as smoothly, predictably, and freely as possible.

International Trade

The exchange of goods and services between countries, driven by comparative advantages.

World Trade Organization

An international organization that regulates trade between nations to ensure that trade flows as smoothly, predictably, and freely as possible.