When calculating how much changes in the money supply will change nominal GDP,we use the money multiplier instead of the spending multiplier.

Question

Quizplus · Accepted Answer

The money multiplier is used to determine how changes in the monetary base affect the total money supply, not directly how they change nominal GDP. The spending (or fiscal) multiplier is more directly related to changes in GDP resulting from changes in spending.

When Calculating How Much Changes in the Money Supply Will