ECONOMICS
AGGREGATE DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The multiplier effect shows
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How spending is magnified in the economy
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How much consumers can spend from their paychecks
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How much the government can spend from their budget
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How often the economy can survive recessions
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Explanation:
Detailed explanation-1: -The multiplier effect refers to any changes in consumer spending that result from any real GDP growth or contraction brought about by the use of fiscal policy. When government increases its spending, it stimulates aggregate demand, and causes some real GDP growth. That growth creates jobs, and more workers earn income.
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