The Multiplier Effect from an Increase in Government Spending Causes

question 257

Multiple Choice

The multiplier effect from an increase in government spending causes additional increases in aggregate demand through:

• A) a decrease in taxes.
• B) even more government spending.
• C) an increase in consumer spending.
• D) a decrease in interest rates.

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Association Is Causation

The incorrect assumption that a relationship between two variables implies that one causes the other; a logical fallacy often encountered in statistical analysis.

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