The multiplier is calculated as the change in:
A)real GDP/change in autonomous expenditure.
B)autonomous expenditure/change in real GDP.
C)nominal GDP/change in autonomous expenditure.
D)real GDP/change in induced spending.

Question

Quizplus · Accepted Answer

The multiplier is calculated as the change in real GDP divided by the change in autonomous expenditure. This is because autonomous expenditures (such as government spending, exports, and investments) have a direct impact on real GDP, and the multiplier measures the extent to which changes in autonomous expenditure are magnified throughout the economy. Therefore, option A is the correct choice.

The Multiplier Is Calculated as the Change In