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Jasmine Dutra
on Dec 16, 2024

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If the marginal propensity to consume (MPC) equals 0.9,the multiplier is _____.

A) 1
B) 2
C) 5
D) 10
E) 12

Marginal Propensity

The rate at which an individual, household, or economy is likely to consume (or save) with respect to an incremental increase in income.

Multiplier

An economic factor that quantifies the impact of increased spending in the economy, leading to a proportional increase in income and consumption.

  • Measure and apprehend the significance of the rudimentary spending multiplier in light of the marginal propensity to consume and save.
  • Understand the relationship between the marginal propensity to consume (MPC) and the spending multiplier.
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Crimson CoburnDec 20, 2024
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