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What happens to the value of the multiplier when the marginal propensity to consume increases?
  • a)
    The multiplier value increases.
  • b)
    The multiplier value decreases.
  • c)
    The multiplier value remains the same.
  • d)
    The multiplier value becomes negative.
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
What happens to the value of the multiplier when the marginal propensi...
When the marginal propensity to consume increases, the value of the multiplier also increases, leading to a larger impact on total income.
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