What is the relationship between the multiplier and the marginal propensities?
What will be an ideal response?
The multiplier is directly related to the marginal propensities. By definition, the multiplier is related to the marginal propensity to save because it equals 1/MPS. Thus, the multiplier and the MPS are inversely related. The multiplier is also related to the marginal propensity to consume because it also equals 1/(1 ? MPC).
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If there is a sole producer of a good, and he faces no threat of competition, it is likely that:
A. government intervention will have no impact on the market. B. government intervention will raise prices to consumers. C. government intervention will increase total surplus. D. government intervention will make things better for buyers and sellers.
Oil is considered:
A. a renewable resource. B. a nonrenewable resource. C. physical capital. D. technology.
To construct a graph that would enable us to find equilibrium GDP, we would need to plot
a. the consumption-income line b. a line showing the sum of consumption and investment at each income level c. the investment spending line d. the consumption-income line and the government expenditures line e. an aggregate expenditure line and the 45-degree line from the origin
The voluntary export restraints on autos by Japan in the early 1980s were:
A. prohibited under the GATT treaty. B. probably approved of by the Japanese car companies since it increased their profits. C. unlike a tariff and did not affect the price of imports. D. unlike an import quota and did not affect the quantity of cars imported.