The Multiplier Effect

question 87

Multiple Choice

The multiplier effect

• A)and the crowding-out effect both amplify the effects of an increase in government expenditures.
• B)and the crowding-out effect both diminish the effects of an increase in government expenditures.
• C)diminishes the effects of an increase in government expenditures,while the crowding-out effect amplifies the effects.
• D)amplifies the effects of an increase in government expenditures,while the crowding-out effect diminishes the effects.

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Definitions:

Net Benefits

The total benefits of some activity or policy less the total costs of that activity or policy.

Price-Fixing

An agreement among competitors to raise, fix, or otherwise maintain the price at which their goods or services are sold, preventing market competition.

Tying Contracts

Agreements where the sale of one product (the tying product) is linked to the purchase of another (the tied product), often scrutinized under antitrust laws.

Horizontal Mergers

Mergers between companies that operate in the same industry, often leading to consolidation and increased market power.