What circumstances will lead to a smaller multiplier?
A)If the MLR becomes smaller.
B)If the MPE becomes bigger.
C)If the MPC becomes bigger.
D)If the MPM becomes smaller.
E)If the MPS becomes bigger.

Question

Quizplus · Accepted Answer

The multiplier is calculated as 1/MPS (where MPS stands for Marginal Propensity to Save). Therefore, if the MPS becomes bigger, the multiplier will become smaller.

What Circumstances Will Lead to a Smaller Multiplier