The concept of the "multiplier effect" in Keynesian economics refers to:

CA Foundation · Business Economics · RTP · September 2025
The concept of the "multiplier effect" in Keynesian economics refers to:
(A) A. The impact of interest rates on investment
(B) B. The magnification of an initial change in spending throughout the economy
(C) C. The impact of taxes on consumer spending
(D) D. The role of exports in economic growth

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. The magnification of an initial change in spending throughout the economy

Topics: Determination of National Income

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