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By HeartfeltQuartz

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17 Questions

  1. What is the multiplier effect in economics?

  1. The multiplier effect is based on the idea that:

  1. The formula for the simple multiplier is

  1. If the marginal propensity to consume (MPC) is 0.8, what is the value of the multiplier?

  1. The multiplier effect leads to a larger change in

  1. If the initial increase in spending is $1,000 and the multiplier is 4, what will be the total increase in income?

  1. The multiplier effect is more significant when

  1. Which of the following is not a factor that influences the size of the multiplier?

  1. If the marginal propensity to consume (MPC) is 0.9, what is the value of the multiplier?

  1. The multiplier effect can amplify the impact of a change in

  1. If the marginal propensity to consume (MPC) is 0.75, what is the value of the multiplier?

  1. The multiplier effect is a concept closely related to

  1. If the initial increase in investment is $500 and the multiplier is 2, what will be the total increase in income?

  1. The multiplier effect tends to stabilize the economy by

  1. If the marginal propensity to consume (MPC) is 0.6, what is the value of the tax multiplier?

  1. If the initial increase in taxes is $800 and the tax multiplier is 5, what will be the total change in income?

  1. If the marginal propensity to consume (MPC) is 0.5 and government spending decreased by $100. what is the total change in income?

Description

Test your knowledge about the multiplier effect, a concept in economics which explains how an initial change in spending can lead to a larger final impact on the economy. This quiz covers the formula for the simple multiplier and scenarios involving different values of the multiplier and marginal propensity to consume.

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