The Multiplier Is

question 302

Multiple Choice

The multiplier is

• A) the part of consumption that is independent of the level of disposable income.
• B) the proportion of total disposable income that is consumed.
• C) the percentage of a given change in income that goes towards consumption.
• D) the number which is multiplied by an autonomous change which gives the change in the equilibrium level of real GDP.

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Definitions:

Working Capital

Current assets less current liabilities.

Current Ratio

A financial metric that measures a company's ability to pay off its short-term liabilities with its short-term assets.

Marketable Securities

Short-term investments that are easily convertible into cash, typically within one year.

Debt-to-Equity Ratio

A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets, crucial for assessing financial leverage.