All of the following are true statements about the multiplier except: A) The multiplier makes the economy
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Question:
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.
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