The Multiplier Effect Following an Increase in Expenditure Is Generated

question 144

True/False

The multiplier effect following an increase in expenditure is generated by induced increases in consumption expenditure as income rises.

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Definitions:

Long-Run Real Wages

The earned wage adjusted for inflation over a period in which all inputs, including labor, can be fully adjusted in the market.

Demand for Labor

The total amount of workers that employers are willing and able to hire at a given wage rate in a specific labor market.

Supply of Labor

The total hours that workers are willing and able to work at a given wage rate.

Wages

Remuneration provided to laborers for their services, usually based on an hourly, daily, or task-completion method.