If a $75 billion increase in autonomous expenditure increases equilibrium expenditure by $150 billion, then the multiplier must be
A) $225 billion.
B) 0.5.
C) $75 billion.
D) 2.

Question

Quizplus · Accepted Answer

The multiplier is calculated as the ratio of the change in equilibrium expenditure to the change in autonomous expenditure. Here, it is $150 billion / $75 billion = 2.

If a $75 Billion Increase in Autonomous Expenditure Increases Equilibrium