Which of the Following Is a True Statement About the Multiplier

question 14

Multiple Choice

Which of the following is a true statement about the multiplier?

• A)The formula for the multiplier overstates the real world multiplier when we take into account the impact of changes in GDP on imports,inflation and the interest rate.
• B)The larger the MPC,the smaller the multiplier.
• C)The multiplier is the ratio of the change in spending to the change in GDP.
• D)The multiplier makes the economy less sensitive to changes in autonomous expenditure.

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Definitions:

Relaxation Techniques

Activities or exercises designed to reduce stress and induce a state of calmness, such as deep breathing, meditation, or yoga.

Acceptance And Commitment Therapy

is a form of psychotherapy that uses acceptance and mindfulness strategies, together with commitment and behavior change strategies, to increase psychological flexibility.

Systematic Desensitization

A behavioral technique used to help individuals overcome phobias and anxiety disorders through gradual exposure to the feared object or situation paired with relaxation exercises.

Realism

A philosophy that emphasizes the representation of the world in a truthful, objective manner, without idealization.