If the MPC is 0.6 and there are no imports or income taxes, the multiplier is
A) 1.7.
B) 6.
C) 0.4.
D) 0.6.
E) 2.5.

Name: If the MPC is 0.6 and there are no imports or income taxes, the multiplier is A) 1.7. B) 6. C) 0.4. D) 0.6. E) 2.5.
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Question

Quizplus · Accepted Answer

The multiplier is calculated as 1/(1-MPC). With an MPC of 0.6, the multiplier is 1/(1-0.6) = 1/0.4 = 2.5.

If the MPC Is 0