What is a multiplier? How does the multiplier effect occur?
The multiplier is the ratio of the change in equilibrium GDP (Y) divided by the original change in spending that causes the change in GDP.
The multiplier effect occurs because one person's additional expenditure constitutes a new source of income for another person, and this additional income leads to still more spending, and so on.
Economics
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In early 2012 the price of computer hard disc drives rose. In a demand and supply model, shifts in what curve or curves could have brought about the higher price?
What will be an ideal response?
Economics
A firm's economic profits are given by
a. total revenue minus total accounting cost. b. the owner's opportunity cost. c. total revenue minus total economic cost. d. total revenue minus the cost of capital.
Economics