Practice The Multiplier and Its Implications - 3.4 | Chapter 2: Theory of Income and Employment | ICSE Class 12 Economics
K12 Students

Academics

AI-Powered learning for Grades 8–12, aligned with major Indian and international curricula.

Professionals

Professional Courses

Industry-relevant training in Business, Technology, and Design to help professionals and graduates upskill for real-world careers.

Games

Interactive Games

Fun, engaging games to boost memory, math fluency, typing speed, and English skills—perfect for learners of all ages.

Typing
Memory
Math
English Adventures
Knowledge

3.4 - The Multiplier and Its Implications

Enroll to start learning

You’ve not yet enrolled in this course. Please enroll for free to listen to audio lessons, classroom podcasts and take practice test.

Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

Define the multiplier effect in simple terms.

💡 Hint: Think about how one action can create many effects.

Question 2

Easy

What does MPC stand for?

💡 Hint: Remember, it's about how much extra income people choose to spend.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What is the multiplier effect?

  • A way to measure unemployment
  • The process by which an initial change in spending leads to a larger increase in income
  • An economic theory about interest rates

💡 Hint: Remember it relates to income and spending.

Question 2

True or False: Increasing government spending during a recession can reduce unemployment.

  • True
  • False

💡 Hint: Think about the role of government in stimulating the economy.

Solve 2 more questions and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

Suppose the government invests $100,000 into a community park, and the MPC is 0.8. Calculate the total income generated in the community.

💡 Hint: Remember to plug the MPC into the formula for the multiplier.

Question 2

During an economic recovery, inflation rises to 5% as government spending increases. Analyze how this inflation impacts the multiplier effect under full employment.

💡 Hint: Consider how increasing prices affect consumer behavior and spending.

Challenge and get performance evaluation