Increases in autonomous expenditure induce ________ in aggregate expenditure thereby making the multiplier ________.
A) a decrease; less than one
B) further increases; less than one
C) further increases; greater than one
D) further increases; unnecessary
E) a decrease; greater than one

Question

Quizplus · Accepted Answer

Increases in autonomous expenditure lead to further increases in aggregate expenditure due to the multiplier effect, and the multiplier is typically greater than one, meaning that the initial increase in spending leads to a more than proportional increase in total economic output.

Increases in Autonomous Expenditure Induce ________ in Aggregate Expenditure Thereby