how-do-varying-marginal-propensities-to-consume-mpc-affect-the-size-of-the-multi

Question

How do varying marginal propensities to consume (MPC) affect the size of the multiplier effect?

Accepted Answer

A higher MPC results in a larger multiplier, amplifying the impact of spending changes.

Answer

A higher MPC results in a smaller multiplier, reducing the impact of spending changes.

Answer

A lower MPC results in a larger multiplier.

Answer

The MPC has no effect on the size of the multiplier.