Multiple Choice
The spending multiplier is defined as:
A) the ratio of the change in equilibrium real GDP to the initial change in spending.
B) the change in initial spending divided by the change in personal income.
C) 1 / (marginal propensity to consume) .
D) 1 / (1 − marginal propensity to save) .
Correct Answer:
Verified
Correct Answer:
Verified
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