Consider the basic AD/AS macro model. The simple multiplier is reflected by the
A)downward movement along the AD curve in response to a change in autonomous expenditure.
B)size of the rightward shift of the AD curve in response to a change in autonomous expenditure.
C)horizontal distance between initial macroeconomic equilibrium and the new intersection of AD and AS in response to a change in autonomous expenditure.
D)size of the downward shift of the AD curve in response to a rise in autonomous expenditure.
E)upward movement along the AD curve in response to a change in autonomous expenditure.

Question

Quizplus · Accepted Answer

The simple multiplier effect is shown by the rightward shift of the AD curve, indicating how much total demand increases in response to an initial change in autonomous expenditure.

Consider the Basic AD/AS Macro Model