The multiplier is calculated as the change in ________ divided by the change in ________.
A)real GDP; autonomous expenditure
B)autonomous expenditure; real GDP
C)nominal GDP; autonomous expenditure
D)real GDP; induced spending

Question

Quizplus · Accepted Answer

The multiplier is calculated as the change in real GDP divided by the change in autonomous expenditure. This concept is fundamental in Keynesian economics, illustrating how initial changes in spending (autonomous expenditure) lead to larger changes in the overall economic output (real GDP).

The Multiplier Is Calculated as the Change in ________ Divided