The multiplier is the ratio of the
A) change in induced expenditures to the change in autonomous expenditures.
B) equilibrium level of real GDP to the change in induced expenditures.
C) change in real GDP to the change in autonomous expenditures.
D) change in autonomous expenditures to the change in real GDP.

Question

Quizplus · Accepted Answer

The multiplier is defined as the ratio of the change in real GDP to the change in autonomous expenditures. It measures the effect that a change in autonomous expenditures (such as government spending or investment) has on the overall level of economic activity.

The Multiplier Is the Ratio of the