Which of the Following Is a True Statement About the Multiplier

Multiple Choice

Which of the following is a true statement about the multiplier?

A) The formula for the multiplier overstates the real world multiplier when we take into account the impact of changes in GDP on imports, inflation, and the interest rate.
B) The larger the MPC, the smaller the multiplier.
C) The multiplier is the ratio of the change in spending to the change in GDP.
D) The multiplier makes the economy less sensitive to changes in autonomous expenditure.
E) The multiplier only applies to changes in government spending.