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differences between the multiplier model and the AS/AD model

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What are the differences between the multiplier model and the AS/AD model?

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Solution Summary

Differences between the multiplier model and the AS/AD model are explored.

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The multiplier was a concept developed by Keynes that states that any increase in injections into the economy (investment, government expenditure or exports) would lead to a proportionally bigger increase in National Income. This is because the extra spending would have knock-on effects creating in turn even greater spending. The size of the multiplier would depend on the level of leakages.

http://www.theshortrun.com/classroom/doctrines/multiplier.html

THE AS/AD model is an ...

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