Which of the following is a true statement about the multiplier?
a. The multiplier rises as the MPC rises.
b. The smaller the MPC, the larger the multiplier.
c. The multiplier is a value between zero and one.
d. The multiplier effect does not occur when autonomous expenditure decreases.
a. The multiplier rises as the MPC rises.
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If e = 0.125, c = 0.08, and D = 720, the total demand for high-powered money is
A) 32.4. B) 3512.20. C) 572.4. D) 147.6.
Daniel notices that every year with a mild winter, his roses begin to bloom in February, but every year with a severe winter, his roses do not begin to bloom until April. He concludes that the severity of the winter is responsible for the month in which his roses begin to bloom. Daniel is
A. very probably correct in his conclusion that the severity of the winter is a cause of when his roses begin to bloom. B. probably misguided in that there is no apparent correlation or causation in this situation. C. definitely confusing correlation with causation. D. likely correct that there is causation, but the causation is more likely running in the opposite direction in that the initial blooming of his roses is the cause of the severity of the previous winter.