Question

The multiplier in the Keynesian model equals:

 

1.the equilibrium level of income for a given level of aggregate expenditure.

2.the increase in autonomous expenditure brought about by a change in income.

3.the equilibrium level of income divided by autonomous expenditure.

4.the increase in equilibrium income when autonomous expenditure increases.

5.the level of equilibrium output corresponding to a given level of aggregate spending

Answer 1

1.the equilibrium level of income for a given level of aggregate expenditure.

Keynesian Multiplier tends to assert increase in aggregate expenditure, which shows that it is directly related.