The multiplier is:

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Question

The multiplier is:

Quizplus · Accepted Answer

The multiplier is equal to 1/(1-MPC), where MPC is the marginal propensity to consume. This formula shows the relationship between changes in aggregate demand and changes in autonomous expenditures. As autonomous expenditures change, they create a ripple effect through the economy, resulting in a change in output that is equal to the initial change in expenditures multiplied by the multiplier.

The Multiplier Is