Other things equal, in a Keynesian income model, the autonomous spending multiplier will __________ if there is a decrease in the marginal propensity to consume, and the Autonomous spending multiplier __________ if there is a decrease in the marginal Propensity to import (MPM).

Question

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The autonomous spending multiplier is inversely related to the marginal propensity to save (1 - MPC). If the MPC decreases, the multiplier decreases. However, a decrease in the marginal propensity to import (MPM) reduces the leakage from the circular flow of income, effectively increasing the multiplier.

Other Things Equal, in a Keynesian Income Model, the Autonomous