Suppose That the Value of the Multiplier Has Increased in Recent

question 227

Multiple Choice

Suppose that the value of the multiplier has increased in recent years. Which of the following could have caused this?

• A) Consumption has become more sensitive to changes in the interest rate.
• B) The costs of inventory storage have fallen.
• C) Changes in the way the unemployment compensation fund is financed have made it more expensive for firms to lay off workers.
• D) "Buy America" campaigns launched by many unions have succeeded in reducing the demand for imported goods.

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Definitions:

Personal Mandate

A requirement for individuals to purchase or otherwise obtain a particular good or service; often used in the context of compulsory health insurance.

PPACA

Patient Protection and Affordable Care Act; a comprehensive health care reform law enacted in March 2010, primarily known for its aim to increase health insurance coverage to more Americans.

Electronic Medical Records

Digital versions of patients' paper charts, improving the efficiency of recording, storing, and accessing medical information and history.

Efficiency Gains

Improvements that allow more to be achieved with the same amount of resources, often leading to cost savings and productivity increases.