Looking for reliable answers? Westonci.ca is the ultimate Q&A platform where experts share their knowledge on various topics. Join our platform to connect with experts ready to provide accurate answers to your questions in various fields. Get immediate and reliable solutions to your questions from a community of experienced professionals on our platform.
Sagot :
The blank is to be filled with the word Multiplier.
The Multiplier effect refers to the effect on national income and product of an exogenous(caused by a variety of factors outside the control of a single organization) increase in demand.
In other words, it means that the multiplier effect is an economic term, referring to the proportional amount of increase, or decrease, in final income that results from an injection, or withdrawal of capital.
Let's take an example. Suppose assume a company makes a $100,000 decline in investment of capital to expand its manufacturing facilities in order to produce less and sell less. After a year of production with the new facilities operating at minimum capacity, the company’s income decreased by $200,000. This means that the multiplier effect was 2 ($200,000 / $100,000). Simply put, every $1 of disinvestment produced an extra decline in $2 of income.
Hence, The idea that the eventual decline in spending will be much larger than the initial (autonomous) decrease in aggregate demand is the Multiplier.
Learn more about Investment:
https://brainly.com/question/3729664
#SPJ4
Visit us again for up-to-date and reliable answers. We're always ready to assist you with your informational needs. Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. We're glad you visited Westonci.ca. Return anytime for updated answers from our knowledgeable team.
