Answer to Question #190836 in Macroeconomics for maria

Question

Explaining multiplier process in open and closed economy by clearly distinguishing the

autonomous and induced expenditures using hypothetical numbers and graphs.

Answer 1

A multiplier is a term used in economics to describe an economic factor that causes increase or changes in many other related economic variables when it is increased or changed. The multiplier effect causes gains in total output that are greater than the change in spending that caused it in terms of gross domestic product.