Ly A Policy (see http://www.rowanonline.com = for University Policies and details). Question 3 1 pt The multiplier effect occurs because as saving levels increase, a greater pool of loanable funds is available for investment spending by businesses. increases in income cause a chain reaction of spending by many businesses and individuals. increases in income cause tax revenues to increase, thereby stimulating increases in government spending levels. businesses copy the spending decisions of their competitors. O households tend to spend any increase in income. Previous Next