The ratio of change in the equilibrium level of output to a change in some autonomous variable is the ?
Correct answer: B. multiplier
- A. automatic stabiliser
- B. multiplier
- C. elasticity coefficient
- D. marginal propensity of the autonomous variable
Explanation
The multiplier measures how much equilibrium output changes in response to a change in an autonomous expenditure variable. It captures the total effect of successive rounds of induced consumption.
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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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