The idea of the multiplier is that a change in ________ expenditure changes real GDP, which then changes ________ expenditure. The change in total expenditure will be larger than the initial change in ________ expenditure.
A) induced; autonomous; induced
B) autonomous; induced; induced
C) induced; autonomous; autonomous
D) induced; induced; autonomous
E) autonomous; induced; autonomous

Question

Quizplus · Accepted Answer

The multiplier effect describes how an initial change in autonomous expenditure (such as investment or government spending) leads to a larger change in real GDP, which then induces further changes in consumption expenditure.

The Idea of the Multiplier Is That a Change in ________