The Multiplier Effect Means That

question 177

Multiple Choice

The multiplier effect means that:

• A)consumption is typically several times as large as saving.
• B)a small change in consumption demand can cause a much larger increase in investment.
• C)a small decline in the MPC can cause equilibrium GDP to rise by several times that amount.
• D)a small increase in investment can cause national income to change by a larger amount.

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Definitions:

Contrast

The difference or distinction between two or more entities, highlighted by comparing their features or qualities.

External Factor

Refers to any influence, condition, or variable that exists outside of an organization and can affect its performance and strategies.

Personality

A combination of emotional, attitudinal, and behavioral response patterns of an individual that are unique and consistent across different situations and over time.

Principles of Perception

Fundamental aspects governing how individuals interpret sensory information from their environment, impacting their understanding and interaction with the world.