The multiplier is greater than 1 because a change in autonomous expenditure leads to
A)more exports.
B)move saving.
C)more induced expenditure.
D)even more autonomous expenditure.
E)more investment.

Question

Quizplus · Accepted Answer

The multiplier effect occurs because a change in autonomous expenditure (such as government spending or investment) leads to a change in induced expenditure (spending by consumers), which then leads to further changes in induced expenditure, and so on. Therefore, a change in autonomous expenditure leads to more induced expenditure (choice C), rather than any of the other options listed.

The Multiplier Is Greater Than 1 Because a Change in Autonomous