If the change in autonomous investment equals $1 trillion and the change in real GDP equals $4 trillion, the multiplier equals 1/4.
Correct Answer:
Verified
Q450: The marginal propensity to consume must increase
Q451: Suppose the economy has no income taxes
Q452: A movement along the consumption function is
Q453: If wealth increases, the consumption function shifts
Q454: Components of induced aggregate expenditure include government
Q456: If the price level is constant, a
Q457: In the very short term, planned investment,
Q458: In the short run, the multiplier typically
Q459: If the multiplier is 3, a $750,000
Q460: Components of aggregate expenditure include saving, consumption
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents