The Keynesian Multiplier Measures

question 181

Multiple Choice

The Keynesian multiplier measures

• A)both the short-run and long-run impacts of an initial change in spending on real GDP.
• B)the long-run impact of an initial change in spending on real GDP.
• C)the short-run impact of an initial change in spending on real GDP.
• D)the long-run impact of a change in real GDP on consumption.
• E)the short-run impact of a change in real GDP on total spending.

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Definitions:

Equilibrium Price

The price at which the quantity of a good or service supplied matches the quantity demanded, causing the market to be in a state of balance.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, leading to a stable market condition without excess supply or demand.

Supply and Demand

Fundamental economic model describing how the price and quantity of a good are determined in a market, based on the relationship between product availability and consumers' desire for it.

Determinant of Demand

A factor that affects the willingness and ability of consumers to buy a product, which can include price, income, tastes, and expectations.