If a $75 billion increase in autonomous expenditure increases equilibrium expenditure by $150 billion, then the multiplier is .
A) $75 billion
B) 2
C) 0.625
D) $225 billion

Question

Quizplus · Accepted Answer

The multiplier is calculated as the change in equilibrium expenditure divided by the change in autonomous expenditure. Therefore, the multiplier is 150/75 = 2.

If a $75 Billion Increase in Autonomous Expenditure Increases Equilibrium