The Expenditure Multiplier Applies Only to Changes in Government Spending

question 18

True/False

The expenditure multiplier applies only to changes in government spending.

---

Definitions:

Rent-Seeking Behavior

Activities aimed at increasing one's share of existing wealth without creating new wealth, often through manipulating the social or political environment.

Net Social Gain

The total benefit to society from producing and consuming a good or service, taking into account both the private benefits and costs and any external benefits or costs.

Innovation

The process of creating new products, services, processes, or technologies that deliver value to society or the market.

Competition

The rivalry among sellers trying to achieve such goals as increasing profits, market share, and sales volume by varying the elements of the marketing mix.