The formula for the multiplier is
A) 1 / MPC
B) 1 / (1 - MPC)
C) 1 + MPC
D) 1 - MPC

Name: The formula for the multiplier is A) 1 / MPC B) 1 / (1 - MPC) C) 1 + MPC D) 1 - MPC
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Question

Quizplus · Accepted Answer

The formula for the multiplier, which is used in economics to analyze the impact of fiscal policy on income, is 1 / (1 - MPC), where MPC stands for the marginal propensity to consume. This formula reflects how an initial change in spending leads to a larger change in national income.

The Formula for the Multiplier Is