In a simple macro model with demand-determined output,the simple multiplier is equal to 1/(1-z),where z equals the
A)average propensity to spend.
B)average propensity not to spend.
C)level of autonomous expenditure.
D)marginal propensity to spend.
E)marginal propensity not to spend.

Question

Quizplus · Accepted Answer

The simple multiplier formula 1/(1-z) in macroeconomics, where z represents the marginal propensity to spend, indicates how much total output will change in response to an initial change in spending.

In a Simple Macro Model with Demand-Determined Output,the Simple Multiplier