Question

The tendency for an increase in the economic activity of one country to lead to a worldwide increase in economic activity is the..."

a. Multiplier effect.
b. Phillips curve.
c. Laffer curve.
d. Keynesian effect.

Answer 1

The expenditure multiplier is a key concept in Keynesian economics. It refers to the idea that a change in spending causes a more than proportionate change in GDP.

Step-by-step explanation:

The expenditure multiplier is a key concept in Keynesian economics. It refers to the idea that a change in spending causes a more than proportionate change in GDP. When one person spends, it becomes another person's income, leading to additional spending and income. This cycle repeats through the economy, resulting in a larger impact on GDP than the initial increase in spending.