The multiplier principle illustrates that
a. an increase in investment spending will be multiplied into a larger increase in GDP.
b. an increase in GDP will be multiplied into a larger amount of investment spending.
c. an increase in GDP will be multiplied into a larger increase in consumer spending.
d. investment spending is always a multiple of consumer spending.
a
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The Federal Reserve System
A) regulates the nation's financial institutions. B) conducts the nation's monetary policy. C) Both answers A and B are correct. D) Neither answer A nor B is correct.
The famous observation that households and firms interacting in markets act as if they are guided by an "invisible hand" that leads them to desirable market outcomes comes from whose 1776 book?
a. David Ricardo b. Thorstein Veblen c. John Maynard Keynes d. Adam Smith