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Economic Definition of aggregate market multiplier. Defined.

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Term aggregate market multiplier Definition: The magnitude of the multiplier impact of an autonomous expenditure change is smaller in the aggregate market analysis, due to a change in the price level, than in the standard Keynesian cross analysis, which assumes a constant price level. The change in the price level triggers an opposite change in aggregate expenditures to that of the initial autonomous expenditure change, thus reducing the magnitude of the multiplier impact.

 

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