Which of the following will generate a multiplier effect in the European economy?
A) An increase in exports of luxury European cars to China.
B) An increase in investment in the French wine industry.
C) A reduction in consumer spending due to a sudden and substantial fall in European stock markets that reduces household wealth.
D) All of the above.

Question

Quizplus · Accepted Answer

All of the options can generate a multiplier effect. An increase in exports (A) and investment (B) can lead to increased income and spending, while a reduction in consumer spending (C) can have a negative multiplier effect, reducing overall economic activity.

Which of the Following Will Generate a Multiplier Effect in the European