The figure above shows two aggregate expenditure lines.
-In the figure above, if the MPC increased, the aggregate expenditure lines would ________ and the multiplier would ________ in value.
A) become less steep; rise
B) become steeper; rise
C) not change; rise
D) not change; fall
E) become steeper; fall

Question

The figure above shows two aggregate expenditure lines.
-In the figure above, if the MPC increased, the aggregate expenditure lines would ________ and the multiplier would ________ in value.
A) become less steep; rise 
B) become steeper; rise 
C) not change; rise 
D) not change; fall 
E) become steeper; fall

Quizplus · Accepted Answer

When the Marginal Propensity to Consume (MPC) increases, the slope of the aggregate expenditure line becomes steeper because each additional unit of income leads to a larger increase in consumption. Additionally, the multiplier, which is calculated as 1/(1-MPC), would rise in value as the denominator decreases with a higher MPC.

The Figure Above Shows Two Aggregate Expenditure Lines