The multiplier is
A) the part of consumption that is independent of the level of disposable income.
B) the proportion of total disposable income that is consumed.
C) the percentage of a given change in income that goes towards consumption.
D) the number which is multiplied by an autonomous change which gives the change in the equilibrium level of real GDP.

Question

Quizplus · Accepted Answer

The multiplier is the number which is multiplied by an autonomous change which gives the change in the equilibrium level of real GDP. This is achieved through the multiplier effect, where an initial change in autonomous spending causes a chain reaction of changes in spending and income throughout the economy, resulting in a larger overall change in equilibrium GDP. The other options are not accurate descriptions of the multiplier concept.

The Multiplier Is