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:

Positive Illusions

Cognitive biases or distortions that contribute to viewing oneself or reality in an overly favorable manner, often linked to improved mental health outcomes.

Unrealistically Optimistic

Having an excessively positive outlook or expectations about the future or a particular outcome, beyond what is justified by the actual circumstances.

Nondepressed People

Individuals who do not exhibit clinical symptoms of depression, characterized by a more stable mood and emotional state.

Take Credit

Refers to the act of claiming responsibility for an achievement, work, or positive outcome, usually to gain recognition or advantage.