Since the Value of the Multiplier Is Always at Least

question 114

Multiple Choice

Since the value of the multiplier is always at least 1,which of the following is correct?

• A) The size of the vertical shift in the aggregate expenditure line is always equal to the change in GDP
• B) The size of the vertical shift in the aggregate expenditure line is always less than the change in GDP
• C) The size of the vertical shift in the aggregate expenditure line is always greater than the change in GDP
• D) The size of the vertical shift in the aggregate expenditure line is always equal to or smaller than the change in GDP
• E) The MPC is always bigger than 1

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Definitions:

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