What is the definition of the simple multiplier?
A) 1.0 divided by the marginal propensity to save
B) 1.0 divided by the marginal propensity to consume
C) the MPS plus the MPC
D) the MPS minus the MPC

Question

What is the definition of the simple multiplier?  
A) 1.0 divided by the marginal propensity to save 
B) 1.0 divided by the marginal propensity to consume 
C) the MPS plus the MPC 
D) the MPS minus the MPC

Quizplus · Accepted Answer

The simple multiplier is defined as 1.0 divided by the marginal propensity to save (MPS), reflecting the relationship between an initial change in spending and the total change in economic output that it generates.

What Is the Definition of the Simple Multiplier