Asked by
Elana Glassman
on Oct 13, 2024Verified
If the multiplier is 2,the MPC is
A) .1.
B) .2.
C) .5.
D) .8.
E) 1.0.
Multiplier
In economics, a factor that quantifies how an initial change in one economic variable (such as investment) will affect changes in other variables, like total output.
MPC
Marginal Propensity to Consume, a measure that describes the proportion of an increase in income that gets spent on consumption rather than being saved.
- Understand the concept and calculation of the fiscal multiplier and the marginal propensity to consume (MPC).
Verified Answer
AB
Learning Objectives
- Understand the concept and calculation of the fiscal multiplier and the marginal propensity to consume (MPC).