In the simple aggregate expenditure model where all components of aggregate expenditure are autonomous except consumption, the size of the multiplier depends on the
A) 45-degree line.
B) height of the consumption function.
C) slope of the aggregate demand curve.
D) slope of the aggregate expenditures curve.

Question

Quizplus · Accepted Answer

The size of the multiplier in the aggregate expenditure model is determined by the slope of the aggregate expenditures curve, which is influenced by the marginal propensity to consume.

In the Simple Aggregate Expenditure Model Where All Components of Aggregate