The value of the multiplier is
A) negative at low income levels.
B) the reciprocal of the marginal propensity to consume.
C) increased as autonomous investment spending declines.
D) never less than 1.
E) difficult to calculate unless you know the change in equilibrium GDP.

Question

Quizplus · Accepted Answer

The multiplier is never less than 1 because it is calculated as 1/(1-MPC), where MPC is the marginal propensity to consume, which is always less than 1.

The Value of the Multiplier Is