The figure above shows two aggregate expenditure lines.
-In the figure above, if the MPC increased, the aggregate expenditure lines would ________ and the multiplier would ________ in value.
A) become steeper; rise
B) become steeper; fall
C) become less steep; rise
D) not change; rise
E) not change; fall

Question

The figure above shows two aggregate expenditure lines.
-In the figure above, if the MPC increased, the aggregate expenditure lines would ________ and the multiplier would ________ in value.
A) become steeper; rise 
B) become steeper; fall 
C) become less steep; rise 
D) not change; rise 
E) not change; fall

Quizplus · Accepted Answer

If the MPC (Marginal Propensity to Consume) increases, the slope of the aggregate expenditure line becomes steeper, as more consumption spending leads to a greater increase in aggregate demand. The multiplier would rise in value because an increase in MPC leads to a larger change in aggregate expenditure for any given change in autonomous spending.

The Figure Above Shows Two Aggregate Expenditure Lines