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

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

Quizplus · Accepted Answer

The multiplier is calculated as 1/(1-MPC). With an MPC of 0.9, the multiplier is 1/(1-0.9) = 10.0.

If the MPC Is