ST 3 S21 - 14 Week Term - Requires Respondus Lock Time Left:1:45:20 Richu Parathuvayalil Saji: Attempt 1 Question 4 (2 points) Given your training in macroeconomics, you are asked to explain changes in equilibrium income and real GDP in the country of Conestoga. Assume the price level is held constant You notice the following sequence of changes in the economy when investment spending increases. You understand that this is due to the expenditure multiplier. Which of the following statements BEST explains this expenditure multiplier process? Explain why. 1. Induced expenditure increases, real GDP increases, autonomous expenditure increases, real GDP increases more, induced expenditure increases again, and the process continues until equilibrium expenditure is reached. 2. Autonomous expenditure increases, induced expenditure increases, real GDP increases, and the price level rises. 3. Autonomous expenditure increases, real GDP increases, induced expenditure increases, real GDP increases more, induced expenditure increases again, and the process continues until equilibrium expenditure is reached. Paragraph V BIUA EVE + . .. 13 4 # % 5 O 8 O 3 4 W R T Y U O P E S D F G H K L X C V B N M alt alt