If investment increases by $300 and, in response, equilibrium aggregate expenditure increases by $600, then the multiplier must be
A) 0.2.
B) 0.5.
C) 2.
D) 5.

Name: If investment increases by $300 and, in response, equilibrium aggregate expenditure increases by $600, then the multiplier must be A) 0.2. B) 0.5. C) 2. D) 5.
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Question

Quizplus · Accepted Answer

The multiplier is calculated as the ratio of the change in equilibrium aggregate expenditure to the change in investment, which is $600 / $300 = 2.

If Investment Increases by $300 And, in Response, Equilibrium Aggregate