Which of the following increases the size of the expenditure multiplier?
A) a decrease in the marginal propensity to consume
B) an increase in autonomous spending
C) an increase in the marginal income tax rate
D) a decrease in the marginal propensity to import
E) an increase in investment

Question

Quizplus · Accepted Answer

A decrease in the marginal propensity to import means that a smaller portion of additional income is spent on imports, leading to a larger portion being spent domestically, which increases the size of the expenditure multiplier.

Which of the Following Increases the Size of the Expenditure