The Numerical Value of the Multiplier Will Be Smaller the

question 22

Multiple Choice

The numerical value of the multiplier will be smaller the

• A) larger the average propensity to consume.
• B) larger the slope of the saving schedule.
• C) larger the slope of the consumption schedule.
• D) smaller the slope of the saving schedule.

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Definitions:

Free-Rider Problem

The inability of potential providers of an economically desirable good or service to obtain payment from those who benefit, because of nonexcludability.

Highly Profitable

Describing a business or activity that generates a significantly higher amount of earnings compared to its costs.

Private Firm

A business owned by private individuals or entities, not traded publicly and not owned by the government.

Good

A tangible item or consumable entity that can satisfy a want, need, or desire, making it useful or enjoyable to consumers.