If households and firms in an economy would save all extra income that they receive so that MPC = 0, then the multiplier in that economy is zero.

Name: If households and firms in an economy would save all extra income that they receive so that MPC = 0, then the multiplier in that economy is zero.
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Quizplus · Accepted Answer

The multiplier would be 1, not zero, because any initial change in spending would not be amplified by further consumption, but the initial change itself still counts.

If Households and Firms in an Economy Would Save All