A $1 Increase in Autonomous Spending Has a Multiplier Effect

question 57

Multiple Choice

A $1 increase in autonomous spending has a multiplier effect greater than one on total expenditures and output because

• A)each expenditure is respent in the same amount continuously.
• B)overtime expenditures tend to increase.
• C)total expenditures include autonomous expenditures.
• D)each time an expenditure occurs the recipient respends a proportion of the funds.