If the spending multiplier is 2, an increase of autonomous spending by 10 will increase equilibrium spending and income by Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a b Question 2 Spending Review с d 2 10 5 20 Correct Answer: ✓d - 20

Macroeconomics
13th Edition
ISBN:9781337617390
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter10: Kenesian Macroeconomics And Economic Instability: A Critique Of The Self Regulating Economy
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Can someone please explain this to me?

If the spending multiplier is 2, an increase of autonomous spending by 10 will increase equilibrium spending and income by
Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.
a
b
Question 2 Spending
Review
с
d
2
10
5
20
Correct Answer:
d - 20
Transcribed Image Text:If the spending multiplier is 2, an increase of autonomous spending by 10 will increase equilibrium spending and income by Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a b Question 2 Spending Review с d 2 10 5 20 Correct Answer: d - 20
Expert Solution
Step 1

The spending multiplier is defined as the ratio of the change in GDP to the change in autonomous expenditure.

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