Asked by
Christopher McCosker
on Nov 16, 2024
Verified
If the multiplier is 3, then the MPC is
A) 1/3.
B) 3/4.
C) 4/3.
D) 2/3.
MPC (Marginal Propensity to Consume)
A measure of the change in consumption resulting from a change in income; specifically, the proportion of additional income that is spent on consumption.
Multiplier
A factor by which an initial change in spending will alter total economic output by a greater amount.
- Attain an understanding of the multiplier effect and its operation in the economic landscape.
Verified Answer
AH
Learning Objectives
- Attain an understanding of the multiplier effect and its operation in the economic landscape.
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