The Multiplier Effect Occurs When

question 123

Multiple Choice

The multiplier effect occurs when:

• A) spending by one person generates income for others and causes others to spend more too, increasing the impact of the initial spending on the economy.
• B) the level of consumer confidence increases more than predicted given a tax cut.
• C) increased spending by one or more individuals causes others to react and increase their savings.
• D) None of these is true.

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Definitions:

Contradictory

Referring to statements or propositions that directly oppose each other such that if one is true, the other must be false.

Truth Values

The valuation in logic assigned to propositions, indicating their truthfulness as either true (T) or false (F).

Biconditional

A logical statement in which both parts imply each other; true only when both parts are simultaneously true or false.

Component

A component or segment of a more extensive whole, particularly a section of machinery or a system.