The multiplier for a change in government purchases is equal to:
A) Change in G × Change in GDP.
B) Change in GDP / Change in
C) Change in G / Change in GDP.
D) Change in G × Change in T.

Question

Quizplus · Accepted Answer

The multiplier for a change in government purchases is calculated as the ratio of the change in GDP to the change in government spending (G), not as a product or involving changes in taxes (T). This reflects how much the economy's output is expected to increase for each dollar increase in government spending.

The Multiplier for a Change in Government Purchases Is Equal