As the MPC rises,the multiplier

Question

Quizplus · Accepted Answer

As the MPC (marginal propensity to consume) rises, it means that people are more likely to spend an additional dollar of income. This leads to increased spending, which in turn boosts aggregate demand and creates a ripple effect of increased economic activity. The multiplier measures this ripple effect, and as spending increases due to a higher MPC, the multiplier also rises. Therefore, the correct answer is A) the multiplier will rise.

As the MPC Rises,the Multiplier