Which of the following statements is true of the multiplier effect?
a. It happens when there is inelastic demand.
b. It leads to little or no change in facilities and
equipment of businesses that produce consumer
products.
c. It happens because business demand is more
stable than the demand for consumer products.
d. It produces highly fluctuating demand for business
products.
Answer: d. It produces highly fluctuating demand for business products.