The practical significance of the multiplier is that it:
A)equates the real interest rate and the expected rate of return on investment.
B)magnifies initial changes in spending into larger changes in GDP.
C)keeps inflation within tolerable limits.
D)helps to stabilize the economy.
Answer:B
The practical significance of the multiplier is that it:
A)equates the real interest rate and the expected rate of return on investment. B)magnifies initial changes in spending into larger changes in GDP. C)keeps inflation within tolerable limits. D)helps to stabilize the economy.