The expenditure multiplier is the ratio of the change in ________ to a change in the ________.

Question

Quizplus · Accepted Answer

The expenditure multiplier measures the change in equilibrium output resulting from a change in autonomous expenditure. Thus, the numerator of the multiplier is the change in equilibrium output and the denominator is the change in autonomous expenditure. Therefore, option D is the correct answer as it correctly identifies the variables in the numerator and denominator of the expenditure multiplier.

The Expenditure Multiplier Is the Ratio of the Change in ________