The multiplier is the ratio of the change in ________ to a change in ________.
A) the MPC; the MPS
B) the equilibrium level of output; some autonomous variable
C) the level of saving; the level of consumption
D) autonomous consumption; induced consumption

Question

Quizplus · Accepted Answer

The multiplier is the ratio of the change in equilibrium level of output to a change in some autonomous variable. This is represented by the formula: 1/(1-MPC) or 1/MPS.

The Multiplier Is the Ratio of the Change in ________