30.3 Expenditure Multipliers
MyEconLab Concept Video
When autonomous expenditure (investment, government expenditure, or exports) increases, aggregate expenditure and real GDP also increase. A multiplier determines the amount by which a change in any component of autonomous expenditure is magnified or multiplied to determine the change in equilibrium expenditure and real GDP that it generates.
The Basic Idea of the Multiplier
An increase in investment increases real GDP, which increases disposable income and consumption expenditure. The increase ...
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