When consumer confidence falls, _ increase in an economy and this amount is _ by the multiplier

Marketing Dec 24, 2020

When consumer confidence falls, _____ increase in an economy and this amount is _____ by the multiplier.

a. injections; unaffected

b. withdrawals; enhanced

c. injections; enhanced

d. withdrawals; unaffected

Expert Solution

The correct option is (b). Withdrawals; enhanced.

Here, it is given that there is a decline in the consumer's confidence in the economy which in turn reduces the faith of consumers in the economy that overall raises the number of withdrawals from the economy. However, this reduction in the money supply will rise or enhance this effect multiplicity.

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