The expenditure multiplier is equal to the change in ________ divided by the change in ________.
A) autonomous expenditure; equilibrium expenditure
B) dependent expenditure; autonomous expenditure
C) real GDP; equilibrium expenditure
D) equilibrium expenditure; autonomous expenditure
E) the price level; real GDP

Question

Quizplus · Accepted Answer

The expenditure multiplier measures the impact of a change in autonomous expenditure on equilibrium expenditure. Therefore, the expenditure multiplier is calculated as the change in equilibrium expenditure divided by the change in autonomous expenditure.

The Expenditure Multiplier Is Equal to the Change in ________