x

The multiplier ratio

The multiplier ratio

The multiplier explains why a change in spending can cause a bigger final change in real GDP or national income. It sits inside aggregate demand analysis, where AD=C+I+G+(X−M)AD = C + I + G + (X - M)AD=C+I+G+(X−M).

2.4.4 The multiplier Lesson

  1. A Level
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  3. /2.4.4 The multiplier