If the MPC is 0,the multiplier is
A)0.
B)1.
C)infinite.
D)None of the above is correct.

Name: If the MPC is 0,the multiplier is A)0. B)1. C)infinite. D)None of the above is correct.
Brand: Quizplus
Rating: 4.8 (48 reviews)

Question

Quizplus · Accepted Answer

When the MPC (marginal propensity to consume) is 0, it means that every additional unit of income is saved rather than consumed. In this case, there is no increase in consumer spending, and hence the multiplier effect is not present. Therefore, the multiplier is equal to 1.

If the MPC Is 0,the Multiplier Is