The expenditure multiplier concept of the aggregate expenditures model
A)is not at all relevant in the AD-AS model.
B)magnifies the shifts of the aggregate demand curve.
C)explains movement up or down the aggregate demand curve.
D)reverses the shift of the aggregate demand curve.

Question

Quizplus · Accepted Answer

The expenditure multiplier magnifies the shifts of the aggregate demand curve by amplifying the initial change in spending, leading to a larger overall impact on aggregate demand.

The Expenditure Multiplier Concept of the Aggregate Expenditures Model