The value of the multiplier increases when _____.
A) the marginal propensity to consume is zero
B) the marginal propensity to save increases
C) the marginal propensity to save decreases
D) the marginal propensity to save is zero

Question

Quizplus · Accepted Answer

The value of the multiplier increases when the marginal propensity to save decreases because the multiplier is inversely related to the marginal propensity to save. A lower marginal propensity to save means a higher marginal propensity to consume, which increases the multiplier effect in an economy.

The Value of the Multiplier Increases When _____