What Is the Effect of an Increase in the MPM

question 49

Multiple Choice

What is the effect of an increase in the MPM?

• A)The MLR will increase and the multiplier will increase.
• B)The MLR will decrease and the multiplier will increase.
• C)The MLR will increase and the multiplier will decrease.
• D)The MLR will decrease and the multiplier will decrease.
• E)The MLR will remain the same but the multiplier will increase.

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Definitions:

Profitable Output

The production or output level from a business operation that generates a financial gain or profit.

Firm

An organization engaged in commercial, industrial, or professional activities, typically with the aim of earning a profit.

Long-Run Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied over a period when all factors of production can vary.

Output

Refers to the quantity of goods or services produced in a given time period by a firm or economy.