The multiplier tells us how much __________ changes after a shift in ____________?
Correct answer: D. output aggregate demand
- A. consumption income
- B. investment output
- C. savings investment
- D. output aggregate demand
Explanation
The multiplier measures how much total output changes in response to a change in aggregate demand or autonomous spending. A small initial spending shift can therefore produce a larger final change in output.
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About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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