A $1 Increase in Autonomous Spending Has a Multiplier Effect

question 57

Multiple Choice

A $1 increase in autonomous spending has a multiplier effect greater than one on total expenditures and output because

• A)each expenditure is respent in the same amount continuously.
• B)overtime expenditures tend to increase.
• C)total expenditures include autonomous expenditures.
• D)each time an expenditure occurs the recipient respends a proportion of the funds.

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Definitions:

Venomous Snakes

Snakes that have venom glands and specialized teeth to deliver venom for hunting and self-defense.

Negative Reinforcement

A behavior modification process where the likelihood of a behavior is increased by removing or avoiding a negative outcome.

Positive Reinforcement

The process of encouraging or establishing a pattern of behavior by offering rewards when the behavior is exhibited.

Neutral

Describes a state or position of impartiality, or not favoring any side in a conflict, competition, or a situation requiring a choice.