If the MPC in the United States was low, it would increase the value of the multiplier.

Name: If the MPC in the United States was low, it would increase the value of the multiplier.
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Question

Quizplus · Accepted Answer

The multiplier is inversely related to the marginal propensity to save (MPS), which is the complement of the marginal propensity to consume (MPC). Therefore, a lower MPC (meaning a higher MPS) would actually decrease the value of the multiplier.

If the MPC in the United States Was Low, It