The Multiplier Principle Indicates That If Business Decision Makers Become

Multiple Choice

The multiplier principle indicates that if business decision makers become more optimistic about the future and, as a result, increase their investment expenditures by $82 billion, real GDP

A) will increase by less than $82 billion if the economy was initially operating well below capacity.
B) will increase by more than $82 billion if the economy was initially operating well below capacity.
C) will increase by more than $82 billion if the economy was initially operating at full-employment capacity.
D) will decline if the marginal propensity to consume is less than 1.