Which of the Following Is a True Statement About the Multiplier

question 9

Multiple Choice

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

• A)The multiplier rises as the MPC rises.
• B)The smaller the MPC,the larger the multiplier.
• C)The multiplier is a value between zero and one.
• D)The multiplier effect does not occur when autonomous expenditure decreases.

---

Definitions:

Linearly Related

Refers to a correlation between two variables in which a variation in one is linked to a corresponding change in the other.

Interaction Term

In statistical models, a variable created by multiplying two or more variables together to investigate if the effect of one variable on the dependent variable is different at different levels of the other variable.

Coefficient

A numerical constant placed at the beginning and serving as a multiplier to a variable in an algebraic formula.

Nominal Variables

Variables that represent categories without any inherent order or ranking among them.