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.

---

Definitions:

Accepted

Generally approved or recognized; widely agreed upon.

Family

A social unit consisting of parents and their children, considered as a group, whether dwelling together or not; also can include a broader network of relatives.

Set Point

A theory suggesting that the body regulates its weight and energy balance through internal controls, aiming to maintain a certain level or "set point."

Evolutionary

Pertaining to evolution, the process by which different kinds of living organisms are thought to have developed and diversified from earlier forms during the history of the earth.