The Size of the Keynesian Multiplier Depends on

question 33

Multiple Choice

The size of the Keynesian multiplier depends on

• A)the location of the expenditure line.
• B)the level of spending.
• C)the level of income.
• D)the location of the 45-degree line.
• E)the marginal propensity to consume.

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Definitions:

Capital-Using Technology

An improvement in technology that requires the use of a greater amount of capital to produce a specific quantity of a product.

Capital-Saving Technology

An improvement in technology that permits a greater quantity of a product to be produced with a specific amount of capital (or permits the same amount of the product to be produced with a smaller amount of capital).

Capital Consumption

The diminution of physical capital's value over time due to use, wear and tear, or obsolescence, also known as depreciation.

Private Capital Flows

Financial resources transferred from private entities in one country to private entities in another, typically through direct investment or loans.