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Author Question: What is the multiplier? What does it determine? Why does it matter? What will be an ideal ... (Read 46 times)

imowrer

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on: Jun 29, 2018
What is the multiplier? What does it determine? Why does it matter?
 
  What will be an ideal response?

Question 2

Explain the differences between a change in supply and a change in quantity supplied.
 
  What will be an ideal response?


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alexanderhamilton

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Reply #1 on: Jun 29, 2018
Answer to Question 1

The multiplier is the amount by which a change in autonomous expenditure is multiplied to determine the change in equilibrium expenditure and real GDP. A change in autonomous expenditure changes real GDP by an amount determined by the multiplier. The multiplier matters because it tells us how much a change in autonomous expenditure changes equilibrium expenditure and real GDP.

Answer to Question 2

A change in supply refers to a shift of the supply curve, which occurs when one of the variables other than the price of the product changes. A change in quantity supplied refers to a movement along the supply curve, which occurs when the price of the product changes.


imowrer

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Reply 2 on: Jun 29, 2018
YES! Correct, THANKS for helping me on my review

brbarasa

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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