If autonomous consumption rises by $40 and,as a result,Real GDP rises by $240,then the multiplier is
A) 4.
B) 5.
C) 6.
D) 10.
E) none of the above

Question

Quizplus · Accepted Answer

The multiplier is calculated as the change in Real GDP divided by the change in autonomous consumption. Therefore, in this scenario, the multiplier would be calculated as:

Multiplier = Change in Real GDP / Change in Autonomous Consumption

Multiplier = $240 / $40

Multiplier = 6

Therefore, the answer is option C) 6.

If Autonomous Consumption Rises by $40 And,as a Result,Real GDP