If the MPC is .9 and there are no income taxes or imports, the multiplier for a change in autonomous expenditure equals
A) 9.0.
B) 100.0.
C) 0.1.
D) 10.0.

Name: If the MPC is .9 and there are no income taxes or imports, the multiplier for a change in autonomous expenditure equals A) 9.0. B) 100.0. C) 0.1. D) 10.0.
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Question

Quizplus · Accepted Answer

The formula for the multiplier is 1/(1-MPC), so in this case, the multiplier would be 1/(1-.9) = 1/.1 = 10.

If the MPC Is