The expenditure multiplier measures the change in
A) autonomous spending that results from a change in equilibrium expenditure.
B) equilibrium expenditure that results from a change in autonomous expenditure.
C) the price level that results from a change in real GDP.
D) consumption expenditure for a given change in disposable income.
E) equilibrium expenditure from a change in induced consumption.

Question

Quizplus · Accepted Answer

The expenditure multiplier measures the change in equilibrium expenditure that results from a change in autonomous expenditure. This concept is fundamental in Keynesian economics, illustrating how initial changes in spending (autonomous expenditure) lead to larger changes in overall economic output (equilibrium expenditure).

The Expenditure Multiplier Measures the Change in