The multiplier measures the:
A) effect of government spending or tax cuts on national income.
B) number of times each dollar is spent in the economy.
C) supply of money in the economy.
D) effect of household spending on national income.

Question

Quizplus · Accepted Answer

The multiplier measures the effect of government spending or tax cuts on national income. It is a concept used in macroeconomics to show how much an increase in government spending (or decrease in taxes) will affect aggregate demand and national income.

The Multiplier Measures The