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Economic Definition of Keynesian cross multiplier. Defined.

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Term Keynesian cross multiplier Definition: An analysis of the multiplier principle using the Keynesian cross intersection between the aggregate expenditures line and the 45-degree equilibrium guideline. The Keynesian cross analysis illustrates the Keynesian multiplier as a shift of the aggregate expenditures line and a subsequent change of the equilibrium level of aggregate production. This analysis illustrates the important role played by the slope of the aggregate expenditures line, and the thus the marginal propensity to consume. An alternate but comparable analysis of the multiplier principle is accomplished using the injections-leakages model.

 

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