The simple multiplier applies to short-run situations in which the price level is constant.The simple multiplier can be defined as
A)national income divided by aggregate expenditure.
B)the change in equilibrium national income divided by the initial change in autonomous expenditure that brought it about.
C)the change in national income resulting from a change in expenditure,multiplied by the number of years since the initial change.
D)a change in aggregate expenditures multiplied by the equilibrium level of national income.
E)the change in national income resulting from a change in saving.

Question

Quizplus · Accepted Answer

The simple multiplier measures the change in equilibrium national income resulting from an initial change in autonomous expenditure. It is calculated as the ratio of the change in equilibrium national income to the initial change in autonomous expenditure that brought it about.

The Simple Multiplier Applies to Short-Run Situations in Which the Price