The greater the _____ and the smaller the _____, the greater the multiplier effect will be in an economy.
A) MPC; MPS
B) MPS; MPC
C) tax rate; MPC
D) imports; MPC

Question

Quizplus · Accepted Answer

The multiplier effect in an economy is greater when the Marginal Propensity to Consume (MPC) is high and the Marginal Propensity to Save (MPS) is low, as a higher MPC means more spending from each unit of income, amplifying the initial increase in spending through the economy.

The Greater the _____ and the Smaller the _____, the Greater

The Greater the _ and the Smaller the _, the Greater