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The multiplier effect occurs because: 1. as saving levels increase, a greater pool of loanable funds is available for investment spending by businesses. 2. increases in income cause a chain reaction of spending by many businesses and individuals. 3. increases in income cause tax revenues to increase, thereby stimulating increases in government spending levels. 4. businesses copy the spending decisions of their competitors.
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Asked 9/29/2012 7:24:50 PM
Updated 9/29/2012 9:22:08 PM
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User: The multiplier effect occurs because: 1. as saving levels increase, a greater pool of loanable funds is available for investment spending by businesses. 2. increases in income cause a chain reaction of spending by many businesses and individuals. 3. increases in income cause tax revenues to increase, thereby stimulating increases in government spending levels. 4. businesses copy the spending decisions of their competitors.

Weegy: 3. increases in income cause tax revenues to increase, thereby stimulating increases in government spending levels.
Expert answered|Panda25|Points 30|

Question
Asked 9/29/2012 7:24:50 PM
Updated 9/29/2012 9:22:08 PM
1 Answer/Comment
This conversation has been flagged as incorrect.
Flagged by debnjerry
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The multiplier effect occurs because: 2. increases in income cause a chain reaction of spending by many businesses and individuals.
Added 9/29/2012 9:22:09 PM
This answer has been confirmed as correct and helpful.
Confirmed by jay901 [2/27/2014 10:29:40 AM]
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