In Economics, ‘multiplier’ is defined as the ratio of increase in income to increase in _______.

Correct option is D

• In economics, the multiplier refers to the ratio of the change in national income (or total income) to the initial change in investment or spending.
• It reflects how much income will increase for every unit of investment made in the economy.
• The multiplier effect occurs because an initial increase in investment leads to more spending and income generation throughout the economy, leading to further rounds of consumption and investment.

•  Liability: This refers to financial obligations and is not related to the concept of the multiplier.
• Debt: While debt can influence investment, the multiplier is specifically linked to investment, not debt.
•  Credit: Credit plays a role in financing investment but is not the factor used to define the multiplier.