The size of the multiplier is equal to the
A) slope of the consumption schedule.
B) reciprocal of the slope of the consumption schedule.
C) slope of the saving schedule.
D) reciprocal of the slope of the saving schedule.

Question

Quizplus · Accepted Answer

The size of the multiplier is determined by the marginal propensity to consume (MPC) or the marginal propensity to save (MPS). The MPC is the slope of the consumption schedule and the MPS is the slope of the saving schedule. The multiplier is the reciprocal of the MPS, so the answer is D.

The Size of the Multiplier Is Equal to the