Suppose That the Value of the Multiplier Has Decreased in Recent

Multiple Choice

Suppose that the value of the multiplier has decreased in recent years. Which of the following could have caused this?

A) Consumption has become less sensitive to changes in the interest rate.
B) The costs of inventory storage have risen.
C) Changes in the way the unemployment compensation fund is financed have made it less expensive for firms to lay off workers.
D) There has been an increase in the demand for imported goods.