The smaller the mpc, the ________ the income-expenditure multiplier and the ________ the effect of a change in autonomous spending on short-run equilibrium output.
A)larger; larger
B)larger; smaller
C)smaller; smaller
D)smaller; larger

Question

Quizplus · Accepted Answer

As the mpc gets smaller, so does the income-expenditure multiplier and the final effects of changes in autonomous spending.

The Smaller the Mpc, the ________ the Income-Expenditure Multiplier and the ________

The Smaller the Mpc, the the Income-Expenditure Multiplier and the