The multiplier shows that as ____________changes, real GDP changes by a__________ amount.
A) induced expenditure; larger
B) autonomous expenditure; larger
C) induced expenditure; smaller
D) autonomous expenditure; smaller

Question

Quizplus · Accepted Answer

Autonomous expenditure is the type of spending that is not directly related to changes in income. It includes things like government spending, investment, and exports. When autonomous expenditure increases, it leads to an increase in real GDP. The multiplier shows that the increase in real GDP will be larger than the initial increase in autonomous expenditure.

The Multiplier Shows That as ____________Changes, Real GDP Changes by A__________

The Multiplier Shows That as __Changes, Real GDP Changes by A