If the marginal propensity to consume (MPC)is 0.9, then the multiplier for a change in autonomous spending will be
A)0.1.
B)9.
C)10.
D)100.

Name: If the marginal propensity to consume (MPC)is 0.9, then the multiplier for a change in autonomous spending will be A)0.1. B)9. C)10. D)100.
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Question

Quizplus · Accepted Answer

The multiplier is calculated as 1/(1-MPC). With an MPC of 0.9, the multiplier is 1/(1-0.9) = 10.

If the Marginal Propensity to Consume (MPC)is 0