The Keynesian multiplier measures
A)both the short-run and long-run impacts of an initial change in spending on real GDP.
B)the long-run impact of an initial change in spending on real GDP.
C)the short-run impact of an initial change in spending on real GDP.
D)the long-run impact of a change in real GDP on consumption.
E)the short-run impact of a change in real GDP on total spending.

Question

Quizplus · Accepted Answer

The Keynesian multiplier measures the short-run impact of an initial change in spending on real GDP. It shows how much an initial increase in spending will lead to an even larger increase in overall spending and output in the economy.

The Keynesian Multiplier Measures