#1
Which of the following is a characteristic of economic multipliers?
They measure the total impact of a change in economic activity.
ExplanationQuantifies the overall effect of economic changes.
#2
What is the formula to calculate the multiplier effect?
Multiplier = Change in output / Change in investment
ExplanationDefines the mathematical relationship between output and investment changes.
#3
Which of the following is NOT a type of economic multiplier?
Price multiplier
ExplanationIdentifies a non-existent multiplier type.
#4
What does a high value of the multiplier indicate?
A small initial change in spending leads to a large overall impact.
ExplanationExplains the significance of a high multiplier value.
#5
What is the relationship between the marginal propensity to consume (MPC) and the multiplier?
They are directly proportional.
ExplanationDescribes the connection between MPC and multiplier.
#6
In the context of economic multipliers, what does 'leakage' refer to?
The loss of economic activity due to imports and savings.
ExplanationDefines 'leakage' in the economic context.
#7
Which factor can influence the size of the multiplier?
The propensity to consume
ExplanationSpecifies a key factor affecting multiplier size.
#8
Which of the following is an example of an induced multiplier effect?
A decrease in consumer spending leads to a decrease in business investment.
ExplanationIllustrates the cause-and-effect relationship in an induced multiplier.
#9
Which of the following statements best describes the accelerator effect in the context of economic multipliers?
It describes the relationship between investment and changes in output.
ExplanationCharacterizes the accelerator effect in economic terms.
#10
What is the difference between a static multiplier and a dynamic multiplier?
Static multiplier considers only direct effects, while dynamic multiplier considers indirect effects.
ExplanationDistinguishes between static and dynamic multipliers.
#11
Which of the following best describes the concept of the balanced-budget multiplier?
It measures the effect of changes in government spending matched by corresponding changes in taxes.
ExplanationDefines the balanced-budget multiplier.