Question

The multiplier (expenditure multiplier) is the ratio between which two measures?

A. marginal propensity to consume AND the size of an autonomous change in nominal GDP.
B. marginal propensity to save AND marginal propensity to consume.
C. total change in real GDP due to an autonomous change in aggregate spending AND the size of the autonomous change in aggregate spending.
D. total change in nominal GDP caused by an autonomous change in aggregate spending AND the size of an autonomous change aggregate spending.

Answer 1

Option C

Total change in real GDP due to an autonomous change in aggregate spending AND the size of the autonomous change in aggregate spending is the ratio between multiplier

Step-by-step explanation:

The expenditures multiplier estimates the variation in aggregate production triggered by variations in an item of autonomous expenditure. The expenditures multiplier is the ratio of the difference in aggregate composition to an autonomous transformation in an aggregate expenditure when using is the unique provoked expenditure.

This multiplier is as manageable as it gets while taking the fundamentals of the multiplier. Autonomous investment triggers the multiplier method and induced consumption affords the cumulatively strengthening communication among the destruction, aggregate production, factor payments, and income.