Question
All of the following are true statements about the multiplier except: A) The multiplier makes the economy less sensitive to changes in autonomous expenditure. B)The
A) The multiplier makes the economy less sensitive to changes in autonomous expenditure.
B)The multiplier is the ratio of the change in real GDP to the change in autonomous expenditure.
C) The larger the MPC, the larger the multiplier.
D) The formula for the multiplier overstates the real-world multiplier when we take into account the impact of changes in GDP on imports, inflation, and the interest rate.
Step by Step Solution
3.45 Rating (155 Votes )
There are 3 Steps involved in it
Step: 1
The detailed answer for the above question is provided below D The formul...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get StartedRecommended Textbook for
Exploring Economics
Authors: Robert L Sexton
5th Edition
978-1439040249, 1439040249
Students also viewed these Accounting questions
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
View Answer in SolutionInn App