Changes in which of the following will affect the size of the multiplier?
I. marginal propensity to import
II. marginal propensity to consume
III. marginal income tax rate
A) I only
B) II only
C) I and II only
D) I, II, and III

Question

Quizplus · Accepted Answer

The size of the multiplier is affected by the marginal propensity to import, consume, and the marginal income tax rate. These factors influence how much of an additional dollar of income will be spent, saved, or taxed, thereby affecting the overall spending and the multiplier effect in the economy.

Changes in Which of the Following Will Affect the Size