Respuesta :

If the spending multiplier is greater than 1, an increase in investment may result in a greater increase in aggregate demand.

The aggregate demand simply rises as a result of an increase in investment when the spending multiplier is said to be greater than one, in essence.

What is Spending Multiplier ?

  • The spending multiplier is seen in terms of economics as a ratio between the change in GDP (Gross Domestic Product) and the change in autonomous expenditure.
  • With the use of an income and spending model, it may be easily shown visually. The value produced by a government's expenditure is said to exceed the amount of such expenditure.

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