Which of the following best describes the multiplier?
A) It shows the magnified change in planned aggregate spending that arises from a change in output.
B) It shows the magnified change in planned aggregate spending that arises from a change in equilibrium output.
C) It shows the magnified change in equilibrium output demanded that arises from a change in income.
D) It shows the magnified change in equilibrium output demanded that arises from a change in planned aggregate spending.

Question

Which of the following best describes the multiplier?  
A) It shows the magnified change in planned aggregate spending that arises from a change in output. 
B) It shows the magnified change in planned aggregate spending that arises from a change in equilibrium output. 
C) It shows the magnified change in equilibrium output demanded that arises from a change in income. 
D) It shows the magnified change in equilibrium output demanded that arises from a change in planned aggregate spending.

Quizplus · Accepted Answer

The multiplier concept in economics refers to the idea that an initial change in spending (planned aggregate spending) will lead to a larger change in the overall equilibrium output demanded. This is because the initial spending creates income for others, who then spend a portion of that income, creating further income for others, and so on.

Which of the Following Best Describes the Multiplier