The multiplier is given by
A) the ratio of the initial change in a component of aggregate demand to the change in the quantity of real GDP demanded at each price level.
B) the ratio of the change in the quantity of real GDP demanded at each price level to the initial change in a component of aggregate demand that produced it.
C) the amount by which the quantity of real GDP demanded at each price level changes in response to an initial change in a component of aggregate demand.
D) the percentage change between the initial change in a component of aggregate demand and the final change in the quantity of real GDP demanded at each price level.

Question

Quizplus · Accepted Answer

The multiplier is the ratio of the change in the quantity of real GDP demanded at each price level to the initial change in a component of aggregate demand that caused it. This can be expressed as a formula: Multiplier = Change in Real GDP demanded / Initial Change in Aggregate Demand.

The Multiplier Is Given by