If the multiplier effect did not exist, the aggregate demand curve would:
A)be steeper.
B)be flatter.
C)be horizontal.
D)not exist.

Question

Quizplus · Accepted Answer

The multiplier effect amplifies the impact of government spending or other demand-increasing policies on aggregate demand, making the aggregate demand curve steeper. Without it, changes in spending would have a less pronounced effect on total demand, implying a steeper curve when the multiplier is present.

If the Multiplier Effect Did Not Exist, the Aggregate Demand