In Order to Simplify the Equation for the Multiplier to Its

question 51

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 about 3/4 for the MPC.
• D)fact that the multiplier effect is represented by an infinite geometric series.

---

Definitions:

Decline

Decline refers to the process of decreasing in quality, quantity, or importance over a period of time.

Conquistadors

Spanish explorers and soldiers who conquered significant portions of the Americas and other lands during the 15th to 17th centuries.

Encomiendas

A labor system in colonial Latin America granting colonists the right to demand tribute and forced labor from Indigenous peoples.

Missionaries

Individuals who are sent to promote their religion in a foreign country through preaching, education, and other activities intended to convert others.