The income-expenditure multiplier arises because one person's additional spending becomes another person's additional income that will generate additional:
A)spending.
B)autonomous expenditure.
C)menu costs.
D)cyclical unemployment.

Question

Quizplus · Accepted Answer

Spending by one person provides income for a second person, which then results in greater spending by the second person, and so on.

The Income-Expenditure Multiplier Arises Because One Person's Additional Spending Becomes