The multiplier is greater than 1 because the change in autonomous expenditure leads to
A) more investment.
B) more saving.
C) less consumption expenditure.
D) more induced expenditure.

Question

Quizplus · Accepted Answer

The multiplier effect occurs when an initial increase in spending (autonomous expenditure) leads to further spending (induced expenditure) that exceeds the initial amount, thus amplifying the initial impact on the economy.

The Multiplier Is Greater Than 1 Because the Change in Autonomous