The Multiplier Effect Shows That a Change in Aggregate Spending

question 44

Multiple Choice

The multiplier effect shows that a change in aggregate spending:

• A) will cause output to move in the opposite direction.
• B) causes output to change even more than the change in aggregate spending.
• C) causes output to change by something less than the change in aggregate spending.
• D) leaves output unaffected.

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Definitions:

Shareholders

Individuals or entities that own shares in a corporation and have an interest in its performance and governance.

Financial Value

The quantifiable worth of an asset, security, or company, often determined by material and tangible factors within markets.

Extrinsic Rewards

Incentives provided by an external source, such as an employer, to motivate employees, which can include wages, bonuses, and other tangible benefits.

Intrinsic Rewards

Satisfaction a person receives from the process or act of performing a particular activity, rather than from any external rewards.