The working of multiplier moves with :

(A) Δ in Consumption

(B) Δ in Demand

(C) Δ in Supply

(D) Δ in Income

(E) Δ in Investment

Choose the correct answer from the options given below :

(A), (D) and (E) Only

The correct answer is option (2) : (A), (D) and (E) Only

The multiplier effect is an economic term, referring to the proportional amount of increase, or decrease, in final income that results from an injection, or withdrawal, of capital. In effect, Multipliers effects measure the impact that a change in economic activity—like investment or spending—will have on the total economic output of something.

The correct factors that affect the working of the multiplier are:

• (A) Δ in Consumption: When consumption increases, it can lead to a multiplier effect as households spend more, stimulating demand.
• (D) Δ in Income: As income increases due to the multiplier effect, it further stimulates consumption and overall demand.
• (E) Δ in Investment: Increased investment can lead to a multiplier effect, as it stimulates economic activity and increases income.

(B) and (C) are not directly related to how the multiplier effect works, which is primarily driven by changes in consumption, investment, and income levels.