In Order to Simplify the Equation for the Multiplier to Its

question 35

Multiple Choice

In order to simplify the equation for the multiplier to its familiar, relatively simple form, we make use of the

• A)assumption that increases in government purchases have no effect on consumer spending.
• B)assumption that the feedback effects associated with changes in government purchases become negligible after two or three rounds of spending have occurred.
• C)empirical evidence that points to a value of aboutfor the MPC.
• D)fact that the multiplier effect is represented by an infinite geometric series.

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Definitions:

Normal Model

A statistical model describing data distribution that is symmetric, bell-shaped, and characterized by mean and standard deviation.

Mathematics Test

An examination or assessment intended to measure a person's knowledge, skills, or abilities in mathematics.

Normal Model

A statistical model where the data follow a bell-shaped distribution, with most of the observations clustering around the center mean.

Standard Deviation

A statistic that measures the dispersion or spread of a set of data points relative to its mean.