Which of the Following Statements About the Multiplier Effect Is

Multiple Choice

Which of the following statements about the multiplier effect is FALSE?

A) It works for increases in spending but not for decreases in spending.
B) It can be caused by a change in government purchases of goods and services.
C) It occurs when new nonincome-determined spending is injected into the circular flow.
D) Its size depends on how much is not spent from each successive round of income that is created.