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:

Budget

An itemized summary of estimated or intended expenditures and revenues for a given period, often used by governments, businesses, and individuals to manage finances.

Impoundment Control Act

A 1974 United States federal law designed to restrict the president's ability to withhold funds that have been appropriated by Congress.

Legislative Authority

The power or right to enact laws, typically vested in a legislative body such as a parliament or congress.

Iron Triangles

Iron Triangles describe the stable, mutual relationships among regulatory agencies, interest groups, and legislative committees, leading to the implementation and perpetuation of specific policies and government actions.