Why does a lower marginal propensity to consume (MPC) result in a smaller multiplier effect?

• A. Because less of the additional income is spent, leading to smaller increases in consumption.
• B. Because it has no impact on the multiplier effect.
• C. Because it reverses the direction of the multiplier effect.
• D. Because more of the additional income is spent, leading to larger increases in consumption.

Answer: (A)