If the multiplier for a change in autonomous expenditure is 10 and there are no income taxes or imports, then the MPC is
A) 0.9.
B) 0.1.
C) 1.0.
D) 9.0.

Name: If the multiplier for a change in autonomous expenditure is 10 and there are no income taxes or imports, then the MPC is A) 0.9. B) 0.1. C) 1.0. D) 9.0.
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Question

Quizplus · Accepted Answer

The multiplier is calculated as 1/(1-MPC), so if the multiplier is 10, then 10 = 1/(1-MPC). Solving for MPC gives MPC = 0.9.

If the Multiplier for a Change in Autonomous Expenditure Is