Question

The expenditure multiplier leads to greater than one-for-one changes in output when autonomous expenditure changes because________.

Answer 1

Answer:

This is because a change in autonomous expenditure changes income and sets off further changes in induced expenditure.

Answer 2

Answer:

the changes in spending will change the income of producers, which in turn lead to greater changes in spending.

Explanation:

The expenditure multiplier

Autonomous expenditure are expenditures that are not affected by the economy's income level, e.g. consumption expenditures that are carried out no matter what the income level is: food, exports, shelter, etc.

There are autonomous consumption expenditures, autonomous investment expenditures, autonomous government expenditures and net exports.