If the marginal propensity to consume (MPC) increases... A. The MPS increases B. The multiplier decreases...

Question

Question

If the marginal propensity to consume (MPC) increases...

A. The MPS increases

B. The multiplier decreases

C. MPC +MPS is less than 1

D. THe multiplier increases

Answer 1

Answer #1

If the marginal propensity to consume increase in the market then the multiplier will also incease, it will decreas the MPS.

The answer is "D".

Answer 2

Similar Homework Help Questions

Marginal Propensity to Marginal Propensity to Consume (MPC) Save (MPS) Multiplier (m) 0.92 10 0.85 0.20 23). a). In th...

Marginal Propensity to Marginal Propensity to Consume (MPC) Save (MPS) Multiplier (m) 0.92 10 0.85 0.20 23). a). In the above table, what is the value of the marginal propensity to consume MPC) that correctly fills in blank (G) and the value of the income multiplier that correctly fills in blank (H)? Page 9 b)When the MPC increases, the income/spending multiplier (increases or decreas es). If MPC decreases? 17)Draw an AD and SRAS graph and label the axis, lines and...
Calculate the values of marginal propensity to save (MPS) and marginal propensity to consume (MPC) when Y=40.

a) If the saving function is given by S° = 0.03Y^2 - 2Y + 150Calculate the values of marginal propensity to save (MPS) and marginal propensity to consume (MPC) when Y=40.
If the marginal propensity to consume (MPC) in your classmate's nation is 3/5 and the marginal...

If the marginal propensity to consume (MPC) in your classmate's nation is 3/5 and the marginal propensity to save (MPS) in your country is 1/10, which of the following must be true? a. Autonomous consumption is lower in your classmate's nation than in your country. b. Autonomous consumption is higher in your classmate's nation than in your country. c. The spending multiplier is smaller in your classmate's nation than in your country. d. Total consumption is lower in your classmate's...

ue or false. MPC+ MPS 1 o True O False Correct. Marginal propensity to consume plus...

ue or false. MPC+ MPS 1 o True O False Correct. Marginal propensity to consume plus marginal propensity to save equals 1. of aggregate expenditure is 5 MPcio 8 when the MPC is.8 and there is an increase in investment spending of $100,000. x Incorrect. First determine the expenditure multiplier, then multiply that by $100,000 to obtain the correct answer True or false. If people save more of their income, the expenditure multiplier will not decrease and aggregate expenditures will...
if the marginal propensity to consume (MPC) is equal to 0.7, government increases spending by $X,...

if the marginal propensity to consume (MPC) is equal to 0.7, government increases spending by $X, and the GDP increases by $1000. Calculate $X. A. $500 B. $100. C. There is not enough information to answer the question. D. $ 400. E. $300.
The marginal propensity to consume (MPC) is 0.60 The multiplier is 25 (Round your answer to...

The marginal propensity to consume (MPC) is 0.60 The multiplier is 25 (Round your answer to one decimal place) Suppose that net exports changes by $-100 The change in real GDP will be S(Round your answer to the nearest dollar)

All else equal, how would an increase in the tax rate affect the government purchases multiplier?...

All else equal, how would an increase in the tax rate affect the government purchases multiplier? A. It increases the multiplier only if the marginal propensity to consume if the MPC is greater than the tax rate. B. It has no effect. C. It increases the multiplier only if the marginal propensity to consume (MPC) is less than the tax rate. D. It increases the government purchases multiplier. E. It decreases the government purchases multiplier.
If the marginal propensity to consume (MPC) equals 0.25 and the government increases spending by $600...

If the marginal propensity to consume (MPC) equals 0.25 and the government increases spending by $600 billion, the total impact on GDP will be approximately:
An increase in the marginal propensity to consume Select one: a increases the multiplier, so that...

An increase in the marginal propensity to consume Select one: a increases the multiplier, so that changes in government expenditures have a larger effect on aggregate demand. b. decreases the multiplier, so that changes in government expenditures have a larger effect on aggregate demand. C. increases the multiplier, so that changes in government expenditures have a smaller effect on aggregate demand. d. decreases the multiplier, so that changes in government expenditures have a smaller effect on aggregate demand. If many...

7. If marginal propensity to consume (mpc) is 0.8, tax rate (t) is 0.2, and marginal...

7. If marginal propensity to consume (mpc) is 0.8, tax rate (t) is 0.2, and marginal propensity to import (mpm )is 0.14, then the multiplier is: a) 4 b) 2 c) 3 d) 2.33 Your answer: Explanation: le 8. Given the value of the multiplier you got from question 7, if the government wanted to raise the equilibrium GDP by 100, it could: a) Raise only G by $100 b) Raise both G and T by 50 c) Raise only...