Other things equal, the multiplier effect associated with a change in government spending is
A) the same as that associated with a change in taxes.
B) equal to that associated with a change in investment or consumption.
C) less than that associated with a change in investment.
D) greater than that associated with a change in investment.

Question

Quizplus · Accepted Answer

The multiplier effect associated with a change in government spending is equal to that associated with a change in investment or consumption because all these components directly affect the aggregate demand in an economy, leading to a multiplied effect on the overall economic output.

Other Things Equal, the Multiplier Effect Associated with a Change