The Simple Formula for Calculating the Size of the Multiplier

question 207

Multiple Choice

The simple formula for calculating the size of the multiplier effect is

• A) 1 + (% of leakages from additional income).
• B) 1 - (% of leakages from additional income).
• C) 1 / (% of leakages from additional income).
• D) 1 × (% of leakages from additional income).
• E) none of the above.

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Definitions:

Automatically Distributes

Refers to processes or systems that allocate resources, duties, or information without the need for human intervention.

Price Rationing

The process by which the market system allocates goods and services to consumers when quantity demanded exceeds quantity supplied.

Bypass

To go around or avoid an obstacle or regulation, often by using alternative methods or routes.

Costly

Incurring a high expense or requiring considerable resources, often more than expected or desired.