The numerical value of the multiplier will be smaller the
A) larger the average propensity to consume.
B) larger the slope of the saving schedule.
C) larger the slope of the consumption schedule.
D) smaller the slope of the saving schedule.

Question

Quizplus · Accepted Answer

The multiplier is inversely related to the slope of the saving schedule. A larger slope of the saving schedule means a smaller multiplier because it indicates a higher marginal propensity to save, reducing the impact of an initial change in spending on the overall economy.

The Numerical Value of the Multiplier Will Be Smaller the