The aggregate demand multiplier effect says that an initial increase in expenditure plans leads to an induced
A)increase in exports.
B)increase in consumption expenditure.
C)increase in government expenditures on goods and services.
D)increase in production expenditure.
E)decrease in the price level.

Question

Quizplus · Accepted Answer

The aggregate demand multiplier effect suggests that an initial increase in spending leads to a chain reaction of increased consumption expenditure, as households and businesses spend more, further boosting demand.

The Aggregate Demand Multiplier Effect Says That an Initial Increase