The expenditure multiplier explains how a change in
A)real GDP leads to a change in induced expenditure.
B)induced expenditure leads to a change in real GDP.
C)induced expenditure leads to a change in autonomous expenditure.
D)autonomous expenditure leads to a change in real GDP.
E)real GDP leads to a change in autonomous expenditure.

Question

Quizplus · Accepted Answer

The expenditure multiplier shows how a change in autonomous expenditure (such as investment, government spending, or exports) leads to a multiplied change in real GDP due to the induced changes in consumption and other components of aggregate demand.

The Expenditure Multiplier Explains How a Change in