An increase in the MPC will increase the simple tax multiplier but have no effect on the simple spending multiplier.

Name: An increase in the MPC will increase the simple tax multiplier but have no effect on the simple spending multiplier.
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Question

Quizplus · Accepted Answer

An increase in the marginal propensity to consume (MPC) will increase both the simple tax multiplier and the simple spending multiplier, as both are dependent on the MPC.

An Increase in the MPC Will Increase the Simple Tax