The effect of an initial spending change causing a larger change in overall output is:
A. the substitution effect.
B. the income effect.
C. the multiplier effect
D. crowding out.
Answer: C
You might also like to view...
The long-run aggregate supply curve will shift to the right if the:
A. potential output of the economy expands. B. economy loses productive capacity. C. economy experiences a supply shock. D. profit levels of firms increase.
Productive activity in the underground economy:
a. results in an overstatement of actual income and production in the national accounting system. b. consists of unrecorded cash transactions. c. is estimated and included in the national income accounting system. d. poses no problem for the measurement of gross domestic product. e. does not affect GDP but is included in the value-added computations.
The potential harm one person might do to another person through accidental, negligent, or purposeful injury is
A. always reflected in equilibrium prices in perfectly competitive markets. B. always central to the concept of 'civil liability'. C. easily incorporated into private contracts between willing buyers and sellers. D. always neglected in equilibrium prices in perfectly competitive markets.
Which of the following always results in an increase in equilibrium price and quantity?
A) an increase in supply and a decrease in demand B) an increase in demand with no change in supply C) an increase in supply with no change in demand D) all of the above