Which of the Following Statements About the Multiplier Is CORRECT

question 79

Multiple Choice

Which of the following statements about the multiplier is CORRECT?

• A) The spending multiplier can work to increase or to decrease equilibrium GDP.
• B) The spending multiplier exists only during economic expansions.
• C) The size of the spending multiplier is dictated by the amount of government spending.
• D) The value of the spending multiplier is the inverse of the marginal propensity to consume.

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Definitions:

Act Consequentialists

A branch of consequentialism focusing on the consequences of individual actions rather than general rules.

Moral Rules

Fundamental principles that govern behavior, considered right and essential by a culture or society, often reflecting shared values, ethics, and expectations for personal conduct.

Rule Consequentialism

An ethical theory that posits the morality of an action depends on the consequences of the rules that would be established by following or endorsing that action.

General Rules

Broad, overarching principles or guidelines that govern behavior or actions in various scenarios.