Multiple Choice
Which of the following correctly describes the spending multiplier?
A) The initial change in consumption, investment, government spending, or net exports divided by the change in equilibrium GDP.
B) An initial increase in aggregate expenditures divided by the equilibrium GDP.
C) An initial increase in aggregate expenditures divided by the change in equilibrium GDP.
D) The ratio of the change in real GDP to an initial change in any component of aggregate expenditures.
Correct Answer:
Verified
Correct Answer:
Verified
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