13) All of the following are true statements about the multiplier except A) The multiplier makes the economy less sensitive to changes in autonomous expenditure. B) The formula for the multiplier overstates the real world multiplier when we take into account the impact of changes in GDP on imports, inflation and the interest rate. C) The multiplier is the ratio of the change in real GDP to the change in autonomous expenditure. D) The larger the MPC, the larger the multiplier. 14) John Maynard Keynes argued that if many households decide at the same time to increase saving and reduce spending, A) this may benefit the economy in the short run, but not in the long run. B) this will have a major negative impact on the economy in both the short run and in the long run. C) the economy will benefit in the short run and benefit by an even greater amount in the long run. D) this may benefit the economy in the long run, but could be counterproductive in the short
13) All of the following are true statements about the multiplier except A) The multiplier makes the economy less sensitive to changes in autonomous expenditure. B) The formula for the multiplier overstates the real world multiplier when we take into account the impact of changes in GDP on imports, inflation and the interest rate. C) The multiplier is the ratio of the change in real GDP to the change in autonomous expenditure. D) The larger the MPC, the larger the multiplier. 14) John Maynard Keynes argued that if many households decide at the same time to increase saving and reduce spending, A) this may benefit the economy in the short run, but not in the long run. B) this will have a major negative impact on the economy in both the short run and in the long run. C) the economy will benefit in the short run and benefit by an even greater amount in the long run. D) this may benefit the economy in the long run, but could be counterproductive in the short
Chapter9: Aggregate Demand
Section: Chapter Questions
Problem 5.10P
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