Final answer:
The correct answer to the question is D.autonomous; autonomous, which indicates that the multiplier effect is based on autonomous spending. An increase in autonomous expenditure leads to a multiplied increase in real GDP due to the interplay between spending and income generation.
Step-by-step explanation:
The multiplier is the amount by which the change in autonomous expenditure is magnified or multiplied to determine the change in equilibrium expenditure and real GDP. For every dollar increase in autonomous expenditure, the multiplier determines the increase in real GDP. Therefore, the correct answer is D.autonomous; autonomous.
The reason behind the expenditure multiplier effect is that an individual's expenditure becomes income for someone else, which in turn leads to more spending and income generation. This cycle continues, leading to a multiplicative effect on the overall real GDP. The formula to represent this is: change in real GDP = multiplier × change in autonomous spending. The size of this multiplier is vital for understanding the impact of fiscal policies, such as the American Recovery and Reinvestment Act of 2009.