The expenditure multiplier is larger than one because
A) an increase in autonomous expenditure induces further increases in aggregate expenditure.
B) an increase in autonomous expenditure brings about a reduction in the real interest rate.
C) additional expenditure induces lower incomes.
D) an increase in autonomous expenditure induces further decreases in aggregate expenditure.
E) the price level rises, thereby reinforcing the initial effect.
A
Economics
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