The Multiplier Model Implies That

Multiple Choice

The multiplier model implies that

A) additional spending by the government will be a multiple of the tax rise needed to fund the spending.
B) changes in autonomous spending will lead to an increase in national income which is greater than the initial increase in spending.
C) changes in government spending will always lead to a proportionate increase in national income.
D) there are no leakages from the circular flow of income.
E) aggregate demand rises by a constant multiple of the change in consumption spending.