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What is the multiplier effect in economics?
  • a)
    The effect of government spending on investment.
  • b)
    The effect of changes in the interest rate on consumer spending.
  • c)
    The effect of changes in aggregate demand on the level of income.
  • d)
    The effect of changes in exchange rates on international trade.
Correct answer is option 'C'. Can you explain this answer?
Verified Answer
What is the multiplier effect in economics?a)The effect of government ...
The multiplier effect refers to the phenomenon where an initial change in spending (usually investment) leads to a larger change in income and output. It magnifies the impact of changes in aggregate demand on the economy.
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What is the multiplier effect in economics?a)The effect of government spending on investment.b)The effect of changes in the interest rate on consumer spending.c)The effect of changes in aggregate demand on the level of income.d)The effect of changes in exchange rates on international trade.Correct answer is option 'C'. Can you explain this answer?
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What is the multiplier effect in economics?a)The effect of government spending on investment.b)The effect of changes in the interest rate on consumer spending.c)The effect of changes in aggregate demand on the level of income.d)The effect of changes in exchange rates on international trade.Correct answer is option 'C'. Can you explain this answer? for B Com 2025 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about What is the multiplier effect in economics?a)The effect of government spending on investment.b)The effect of changes in the interest rate on consumer spending.c)The effect of changes in aggregate demand on the level of income.d)The effect of changes in exchange rates on international trade.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for B Com 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What is the multiplier effect in economics?a)The effect of government spending on investment.b)The effect of changes in the interest rate on consumer spending.c)The effect of changes in aggregate demand on the level of income.d)The effect of changes in exchange rates on international trade.Correct answer is option 'C'. Can you explain this answer?.
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